Robinhood CEO Vladimir Tenev has confirmed that the firm will cut 23% of its staff.
In an official update, Tenev acknowledged that the present predicament was exacerbated by the company’s miscalculation of retail demand for cryptocurrency and stock products.
The decision is also motivated by a whopping 44% decline in revenues and anemic trading activity which has forced the company to batten down the hatches further.
“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the Covid era would persist into 2022”, Tenev wrote in a blog update.
He mentioned that the broad cryptocurrency market crash was another reason why the company had decided to reduce operations.
The company cut 9% of its workforce in April and there are no guarantees that this downsizing won’t continue.
Tenev said that the ambitious staffing trajectory was something he took full responsibility for – including the way the present realities have turned out.
Robinhood enjoyed a quick rise to prominence with the company riding the popularity of cryptocurrency markets, and even some of the smaller profile cryptocurrencies, such as Dogecoin.
The platform made it simple for investors to interact with its products and become more financially literate which drove a wave of young investors to the markets.
Robinhood was also involved in the GameStop saga when grassroots investors rallied to defy investors’ expectations and caused many short sellers to lose a significant amount on the foiled stock bid.
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