Robinhood fires 23 percent of its employees, blaming crypto meltdown – The New York Times | Omd Cialis

Robinhood, the trading app that popularized one-click trading and helped fuel last year’s meme stock frenzy, said Tuesday it would lay off about 23 percent of its workforce.

Vlad Tenev, Robinhood’s chief executive officer, said in a blog post that the layoffs would affect employees across the company, particularly those in operations, marketing and program management.

Robinhood declined to comment on the layoffs.

The announcement followed closely the April cuts, when Robinhood laid off 340 workers, or about 9 percent of its then-employees. Since then, Mr. Tenev wrote, further deterioration in the economy, including inflation and the collapse of the crypto market, has “reduced client trading activity and assets under custody.” Bitcoin’s price has fallen by more than half this year to around $23,000 per coin. The cryptocurrency surged as high as $66,000 in late 2021.

The layoffs come amid a wave of job cuts at tech companies, including some cryptocurrency firms. In June, cryptocurrency exchanges like Coinbase and Gemini announced they were laying off employees. Last week Shopify, an online marketplace, announced that it would lay off 10 percent of its 10,000 employees.

In his Tuesday memo, Mr. Tenev said Robinhood misjudged the economy and trade activity. “As CEO, I have approved and taken responsibility for our ambitious workforce plan – that’s up to me,” he wrote.

The company also released its second-quarter results on Tuesday, and reported that its monthly active users fell to 14 million in June, down from 1.9 million.

The turmoil represents a major downfall for Robinhood, which became a major player in the meme stock craze in early 2021, as investors banded together to bid shares of companies like video games retailer GameStop and cinema chain AMC higher . On Jan. 27, 2021, GameStop shares closed down nearly 1,800 percent compared to a few weeks earlier, a record. Then Robinhood restricted trading in some meme stocks. The restrictions caused shares to plummet. Trials, an investigation by the Securities and Exchange Commission, and congressional hearings soon followed.

Robinhood’s stock price surged during the meme stock trade. As of August 7, 2021, the company was valued at $46 billion, up about 60 percent from its valuation a week earlier. But its stock has plummeted 50 percent since the beginning of the year as it continues to deal with the fallout.

The layoffs come at a challenging time for financial technology companies.

Coinbase, the publicly traded cryptocurrency exchange, laid off 18 percent of its employees in June amid the crypto market crash. Other major crypto companies such as OpenSea, Gemini and Crypto.com have also cut jobs.

“All overstaffed – Coinbase overstaffed, Robinhood overstaffed. When money was easy, they just hired, hired, hired,” said Dan Dolev, senior analyst at Mizuho. “I’m not surprised to see these cuts.”

The overall value of the cryptocurrency market has plummeted to around $1 trillion from $3 trillion last year as crypto trading craze peaked and Bitcoin’s price hit a new high.

Robinhood has been working this year to grow its crypto arm, listing new coins and launching a crypto wallet product. “The only thing I disliked the most about Robinhood is their crypto exposure,” said Mr. Dolev. “Anything that has no intrinsic value is always prone to problems.”

Also on Tuesday, the New York State Department of Financial Services announced that it will fine Robinhood’s crypto operation $30 million for violating anti-money laundering and anti-cybersecurity regulations.

“As its business grew, Robinhood Crypto failed to invest the right resources and attention to develop and maintain a culture of compliance,” Adrienne A. Harris, Superintendent of Financial Services, said in a statement.

Cheryl Crumpton, Associate General Counsel at Robinhood, said in a statement that the company is “delighted” that the settlement has been finalized. “We have made significant strides in building industry-leading legal, compliance and cybersecurity programs and will continue to prioritize this work to best serve our customers,” she said.

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