Online retail broker blamed the economy, resulting in a drop in user numbers and net revenues that fell 44% year on year. However, revenue from crypto increased moderately this quarter.
Robinhood, an online brokerage company, will lay off almost a quarter its employees. The reason is a continuing deterioration in the macro environment as well as a large crypto market crash.
The bad news was posted by Vlad Tenev, co-founder and CEO. It came on Tuesday, the day that the firm’s Q2 financial results were released and the New York State Department of Financial Services announced an HTML3 million fine to the crypto branch of the company for alleged Anti-Money laundering, cybersecurity, and consumer protection violations.
Tenev stated that the layoffs would have an impact on all functions of the company, including marketing and operations. Around 23% of staff were let go. According to the Financial Times , there were approximately 780 employees who would be affected.
Robinhood laid off 9 percent of its employees earlier this fiscal year. Tenev stated that the reductions “didn’t go far enough”. He also pointed out economic conditions and the collapse in the crypto market as contributing factors to the move.
“This has further decreased customer trading activity, and assets under custody.”
The company also misunderstoodly believed that the increased engagement seen at the start of the COVID-19 epidemic would continue. Tenev wrote:
“As CEO, we approved and took responsibility to our ambitious staffing path — this is on us.”
published its quarterly financial reports a day before scheduled. The results were disappointing with net revenue of $318 million down 44% year-on–year but up 6% over last quarter. The net loss was $295million, down from $502 million in Q2 2021.
Monthly active users fell 1.9 million from the last quarter to 14.0million in June. Assets under custody decreased 31% to $64.2billion in that period.
However, revenue from cryptocurrency increased 7% quarter-onquarter to $58 millions
Robinhood saw a notable increase in share prices after FTX CEO Sam BankmanFried paid $650million for a 7.6% stake. According to Financial Time, share prices dropped more than 4% Tuesday after-hours trading.
