Robinhood cuts 23% of its workforce as fewer users trade

The Associated Press

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NEW YORK (AP) — Robinhood Markets said Tuesday it’s cutting nearly a quarter of its workforce, as crashing cryptocurrency prices and a turbulent stock market keep more customers off its trading app.

CEO Vlad Tenev said the company, whose easy-to-use app helped bring a new generation of investors to the market, will reduce its headcount by about 23%. The reduction of about 780 jobs follows another round of layoffs announced earlier this year, which cut 9% of its workforce and “did not go far enough” in cutting costs, Tenev said in a post on the company’s blog.

The highest inflation in 40 years, and sharp hikes in interest rates by the Federal Reserve to combat it, have sent prices reeling across all kinds of financial markets, particularly those popular among Robinhood customers. Bitcoin has fallen to roughly $23,000 from its record of nearly $69,000, with prices crashing across the crypto ecosystem. Stocks on Wall Street, meanwhile, dropped more than 20% from their record to put the S&P 500 in what’s called a bear market.

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All that tumult means Robinhood saw its number of monthly average users drop, which hurts the company because it does best when its customers are trading a lot. The company based in Menlo Park, California, said it had 14 million monthly active users in June, down from 15.9 million three months earlier and from 21.3 million in last year’s second quarter.

Altogether, Robinhood reported a net loss of $295 million, or 34 cents per share, for the three months through June. That’s a narrower loss than the $502 million, or $2.16 per share, reported for last year’s second quarter.