Robinhood Markets announced it would sack 9 per cent of its full-time employees to reduce the number of “duplicate” jobs at the retail brokerage.
Just two days ahead of the release of its first-quarter results, chief executive Vlad Tenev announced the lay-offs, saying the company’s “period of hyper growth” in 2020 and the first half of 2021 had resulted in its headcount increasing from 700 to nearly 3,800.
During this phase, thanks to the stay-at-home nature of the pandemic and the “meme stock” craze, Robinhood increased its net funded accounts to 22mn from 5mn.
“This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal,” Tenev wrote in a blog post on Tuesday afternoon.
Robinhood had 3,800 full-time employees as of December 31 2021, according to its latest 10-K filing with the US Securities and Exchange Commission.
Tenev said the decision to let go 340 workers “wasn’t easy”, but was a “deliberate step” to make sure the company improved its efficiency and was responsive to changing customer needs.
Robinhood would introduce new products this year across its brokerage, crypto and spending and saving categories, Tenev said.
Last week, Robinhood agreed to buy UK crypto company Ziglu as part of an effort to expand beyond share trading and make a second attempt at cracking the British market.
Robinhood reports earnings after the closing bell on Thursday, almost nine months since floating on the Nasdaq.
Analysts expect a net loss of $310.6mn on revenue of almost $356mn, according to a Refinitiv poll. The company said in February it expected revenue in the first quarter to be less than $340mn.
Shares, which closed at a record low $10 on Tuesday, fell a further 5.5 per cent in after-hours trading.