Robinhood said Tuesday it was laying off nearly a quarter of its employees as inflation and a crypto market crash paralyzed activity on the stock trading platform.
Layoff emails went to 23 percent of workers, known internally as “robin hoodies,” in a cost-cutting move the Silicon Valley-based company says it will keep at about 2,600 employees.
Internet giants, whose business has boomed during the pandemic, have been hit by inflation, the war in Ukraine, supply problems and people returning to pre-Covid lifestyles.
Robinhood cut 9 percent of its staff earlier this year, but that wasn’t enough, CEO Vlad Tenev said in a blog post.
“Since that time, we have seen a further deterioration in the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash,” Tenev said.
“This has further reduced client trading activity and assets under custody.”
Meanwhile, financial services regulators in New York state announced on Tuesday that Robinhood’s cryptocurrency unit will be fined $30 million for failing to meet mandatory cybersecurity and anti-money laundering standards.
The failure “resulted in significant violations” of state regulations, said state financial services superintendent Adrienne Harris.
The shortcomings at Robinhood Crypto, meanwhile, stemmed from “significant deficiencies” in management, which included a failure to foster “an appropriate culture of compliance” with banking regulations, regulators said.
Robinhood Associate General Counsel Cheryl Crumpton said the company is “delighted” that the matter will be resolved in a settlement.
“We have made significant progress in building industry-leading legal, compliance and cybersecurity programs and will continue to prioritize this work to best serve our customers,” Crumpton said in response to an AFP inquiry.
The layoffs at Robinhood will focus on operations, marketing and program management, Tenev said.
“In the short seven years since Robinhood launched globally, we have adapted to challenges and forced the financial industry to adapt to us,” Tenev said.
“We have overcome many obstacles and turned each one into a stronger and more resilient company,” he said.
#Stock #trading #platform #Robinhood #Axes #staff
