The downsizing is linked to plummeting cryptocurrency values and an unstable stock market, both of which have kept customers off the Robinhood trading app. The layoffs come just three months after the platform reduced its headcount by 9%.
Following this new round of layoffs, the company is left with nearly 2,400 employees. According to Robinhood officials cited by timesnownews.com, the layoffs primarily affected the fintech’s operations, marketing and programme management functions.
The same officials further stated that the previous headcount drop was not enough and that the company was operating with more staff than appropriate in this new environment.
Robinhood disclosed its second quarter results and reported net revenue of USD 318 million on a net loss of USD 295 million.
According to the Wall Street Journal, the New York State Department of Financial Services (NYDFS) issued a fine of USD 30 million to the cryptocurrency trading division of Robinhood. The entity was fined for alleged violations of anti-money laundering (AML) and cybersecurity standards.
A report from the New York State Department of Financial Services reveals that Robinhood needs to hire an impartial consultant to assess its compliance. The same report states that the company’s Bank Secrecy Act and AML compliance program was unable to move away in a timely fashion from its manual transaction monitoring system.
In 2022 Robinhood introduced a new lending feature that allowed its users to lend out their stocks. The company also announced its plans to roll out non-custodial crypto wallets, and its expansion efforts included the buyout of UK-based crypto company Ziglu.
That being said, according to businessofapps.com, Robinhood reported a 42% drop in revenue in Q1 2022 when compared to Q1 2021. This is consistent with a drop in monthly active users to 15.9 million in Q1 2022, down 41% from a 22.5 million peak in 2021.
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