Robinhood Markets is eliminating virtually 1 / 4 of its workforce and shutting places of work after a punishing first yr as a public firm.
The app-based brokerage dismissed 780 folks, or about 23% of employees, and likewise introduced the departure of a prime govt Tuesday. Reductions have been concentrated in operations, advertising and marketing and program administration capabilities, Chief Govt Vlad Tenev mentioned in an announcement.
A pandemic buying and selling growth — together with the meme-stock frenzy that drove up shares of GameStop Corp. and others — fueled the corporate’s drive to an preliminary public providing in July 2021. The enterprise rapidly slumped, with month-to-month energetic customers on its app declining and shares cratering.
“I anticipated that what we noticed in 2020 and 2021 by way of market situations would last more than it turned out to final, and in order that’s on me,” Tenev, 35, mentioned in a convention name with journalists. “The truth of it was we over-hired, specifically in a few of these help capabilities.”
The transfer, which follows an earlier headcount discount in April when Robinhood eradicated about 9% of its employees, brings the full variety of staff dismissed this yr to greater than 1,000.
In a separate submitting Tuesday, Robinhood mentioned that Chief Product Officer Aparna Chennapragada is leaving the corporate and that it’s going to shut two places of work. The firm will incur $30 million to $40 million in expenses for severance and advantages and $15 million to $20 million tied to the workplace closures, in keeping with the submitting.
The corporate will transition to a mannequin wherein normal managers take broad duty for elements of the enterprise to do away with hierarchies, Tenev mentioned within the assertion.
Tenev, who based the corporate in 2013 with Stanford College roommate Baiju Bhatt, advised staff that they might obtain a Slack message about their standing. Those that are shedding their jobs might be allowed to stick with the agency till Oct. 1.
Robinhood additionally reported second-quarter outcomes a day forward of schedule, saying its web loss for the interval was $295 million, or 34 cents a share. Web income tumbled 44% from a yr earlier to $318 million.
Shares of Robinhood, which misplaced greater than three-quarters of their worth because the IPO, slid 1.5% to $9.09 in prolonged buying and selling in New York.