The so-called “crypto winter” continues to bite deep into the sector, as crypto trading platform Robinhood becomes the latest to divest itself of staff as its revenues plummet.
Robinhood, the one time go-to platform for the average retail investor wanting to have a dabble in crypto, is having to hunker down and dig deep in order to survive.
Fresh on the heels of a $30 million fine from the New York regulator for failures in the areas of anti-money laundering and cybersecurity, the company has now announced further cuts, as CEO Vlad Tenev admits, the April job reductions “did not go far enough”.
The current lay-offs are the most severe yet and the company announced that nearly 25% of the workforce would be let go.
This also comes as the quarterly reported revenues for Robinhood came in at $318 million, which was 44% down on the $565 million in the same quarter last year.
On the staffing situation, CEO Tenev said:
"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,"
"In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory - this is on me."
The latest cuts will affect 780 staff, and Tenev said his company would offer “wellness” support to any who asked for it. He stated that the staff could stay in position until the 1 October, and then claim a severance package and be given help in finding another job.
In the past, Robinhood has not exactly covered itself in glory. In January 2021 the platform caused outrage when it restricted customers from buying shares in GameStop, which was suffering a short squeeze. Many commentators said that Wall Street was for once on the wrong side, and that Robinhood intervened to protect it.
The company has also been criticised in the past for listing the extremely risky cryptocurrency meme stocks, which were pushed on social media, and became very popular with the less educated retail investors.
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