American commission-free broker, Robinhood (Nasdaq: HOOD) is going to significantly reduce its workforce, laying off around 9 percent of its full-time employees. The decision came when publicly-traded Robinhood stocks are trading at an all-time low price.
In an official letter published on Tuesday, Robinhood’s CEO, Vlad Tenev pointed out that the broker increased its headcount almost six times from 700 to nearly 3800 between 2019 and 2021. That was particularly fueled by Robinhood’s revenue growth from around $278 million to $1.8 billion.
“This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal. 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,” Tenev wrote.
But, the company will not freeze its hiring and “will retain and continue to hire exceptional talent in key roles.”
HOOD at All-Time Low
However, Tenev did not mention the falling value of Robinhood stocks on the stock markets. The company went public in mid-2021 with an initial public offering (IPO). At its peak in August 2021, HOOD stocks peaked at roughly $55 but have slumped almost 82 percent since.
Robinhood disrupted the retail trading industry with its commission-free model. But, the company is now heavily dependent on cryptocurrency trading as crypto traders are now generating a large part of its revenue.
Additionally, the broker has reported heavy losses for the last few quarters: in the last quarter of 2021, the platform suffered a net loss of $423 million, while in the prior quarter, it had reached $1.3 billion.
Meanwhile, the platform continues to expand its presence on the crypto front. It recently purchased British crypto startup Ziglu to further enhance its presence in the country.
“We will continue to accelerate our product momentum through 2022 and will introduce key new products across Brokerage, Crypto and Spending/Saving,” Tenev added.
