The fintech company, Robinhood, had a hectic Tuesday as it announced plans to lay off nearly a quarter of its staff, among other issues. The layoffs are mainly in the operations, marketing, and program management departments.
The company announced that it was laying off 9% of its staff in April. Vlad Tenev, CEO and Co-Founder of Robinhood, blamed record high inflation and the crypto markets crashing for these layoffs in the company’s statement and said that the company’s layoffs in April “did not go far enough.”
The statement also announced that Robinhood plans to restructure to a General Manager (GM) structure. Tenev said with hope behind his voice, “This change will flatten hierarchies, reduce cross-functional dependencies, and remove redundant roles and positions. There is a lot to go through here, and we will discuss our new structure in more depth at this Thursday’s All-Hands.”
Tenev reassured all staff that they would make it out of this. Those who were let go can work until October 1 of this year and still collect pay and benefits. In addition, they will receive a cash severance and COBRA medical and dental payments, and the company will offer vision insurance premiums, job search assistance, and wellness support.
While Tenev is optimistic about the company and its future, Robinhood did not do well in the second quarter, which was also released on Tuesday. Tenev believes that the reorganization and layoffs will only be a bump in the road. He wrote directly to the staff who will remain at Robinhood, “We’ve overcome many obstacles and have emerged from each a stronger and more resilient company. This will be no different.”
Although Robinhood’s total revenue was up from $299 million to $318 million, the company fell short of its $321 million estimation. The revenue number of $318 million in the second quarter of this year is nowhere near last year’s $565 million.
Robinhood also received a fine of $30 million on Tuesday from the New York State Department of Financial Services for failures in several areas. As Robinhood seems to circle the drain by experiencing not only fines but a decrease in monthly active users and assets under custody, all Robinhood employees can do is be grateful for what is being offered to them.