Robinhood Takes Drastic Measure Amid Plummeting Stock PricesThe former unicorn experienced massive growth during the pandemic, but hasn't sustained it since.
ByAmanda Breen•
U.S. consumer investing and trading service companyRobinhoodonce enjoyed unicorn status, thenwent public at $38 per sharein July 2021, reaching$85 per shareat its peak. But that value has since tumbled below $10 per share, and on Tuesday, CEO Vlad Tenevannouncedthat the company would lay off 9% of its full-time employees.
PerReuters,Robinhoodhad 3,400 employees earlier this year, and while the report didn't distinguish between full-time and contract employees, according toTechCrunch's calculations, the newworkforce cutswill impact roughly 300 people.
Ina lettershared with Robinhood employees after a company-wide meeting, Tenev citedpandemic lockdowns, low interest rates andfiscal stimulusas factors in the company's rapid growth, noting that net funded accounts climbed from five million to 22 million in 2021, with revenue skyrocketing from approximately $278 million in 2019 to more than $1.8 billion in 2021.
As the company grew, so did its workforce, increasing almost six-fold from 700 to 3,800 in that two-year period. "This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal," Tenev wrote. "After carefully considering all these factors, we determined that making these reductions to Robinhood's staff is the right decision to improve efficiency, increase our velocity and ensure that we are responsive to the changing needs of our customers."
Related:3 Things to Know About Robinhood and Zero-Commission Stockbrokers
Despite the sharp decline overall, the company did see its valueincrease 25%in March after itannouncedthe extension of its equity trading hours, with the potential for 24/7 equities investing moving forward.
Robinhood isexpected to reportits Q1 2022 financial performance on April 28.
Robinhood Markets Inc was down over 5% today as of 10:38 a.m.
