Robinhood Lays Off 9% Workforce, Shares drop

Robinhood is laying off 9% of its full-time workforce, CEO Vlad Tenev announced, as the shares of the company’s stock hit a new low. - 2022-04-27T152102.229.jpg

Tenev, in a blog post, said that the lay-offs came after a headcount growth that “led to some duplicate roles and job functions, and more layers and complexity than are optimal.”

According to Reuters, the online trading platform had 3,400 employees, so around 300 people may be affected by the cut.

Since the beginning of 202, Robinhood has witnessed an increase in its employees from 700 to 3,800.

Regardless of the lay-off, Robinhood claims that its financial position is strong. Tenev announced that the company has over $6 billion in cash on its balance sheet.

Tenev said, “after carefully considering all these factors, we determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers.”

Following the news of the lay-off, shares of the company’s stock closed at $10 on Tuesday, the lowest price since Robinhood went public in July 2021.

Robinhood’s layoff announcement comes days before the company is expected to report its Q1 2022 financial performance.

The company posted a $423 million net loss for its last quarter.

In one of its major recent crypto developments, Robinhood officially rolled out its long-awaited cryptocurrency wallet in early April, providing access to more than 2 million customers on the waiting list for the digital product.

The release of the wallet shows the company’s commitment to the crypto space, Robinhood said. Robinhood’s wallet will allow users to experience crypto interaction outside the company’s trading platform, such as buying non-fungible tokens (NFTs).

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Robinhood crypto wallet waitlist hits 1 million people

More than 1 million people are on the waitlist for Robinhood’s long-awaited crypto wallet according to CEO Vlad Tenev

Speaking to Jim Cramer during CNBC’s Disruptor 50 summit on Oct. 21, Tenev stated that was very “proud” of Robinhood’s progress in crypto, as he highlighted the firm’s recent push to provide a crypto wallet for its users:

“A lot of people have been asking us for the ability to send and receive cryptocurrencies, transfer them to hardware wallets, transfer them onto the platform to consolidate. And you know, the crypto wallets waitlist is well over a million people now, which is very exciting.”

“We see an opportunity to continue growing that business,” he added.

Robinhood users have long urged the company to develop a crypto wallet as the platform currently does not support deposits or withdrawals, and only allows users to buy crypto with U.S. dollars and trade digital assets on the platform.

On Sept. 22, Robinhood finally announced its plans to roll out a digital asset wallet, and opened up a waitlist for first access to the new feature. A Robinhood representative told Market Watch last month that the wallet will debut this month for some users, and will eventually open up to all users in early 2022.

During the event Tenev emphasized the importance of the emerging crypto sector, noting that it’s “here to stay as an asset class” and it holds specific advantages such as being able to connect a global market.

“So, you know, regardless of where you are in the world whether you’re in the U.S. or overseas, you can have a wallet, you can send people cryptocurrencies from that wallet to their wallet.,” he said.

Related: Robinhood launches 24/7 phone support, crypto users included

Robinhood first launched Bitcoin (BTC) and Ether (ETH) trading in 2018 for customers in five U.S. states. Robinhood has since expanded its altcoin support to assets such as Dogecoin (DOGE) and Litecoin (LTC), and currently allows traders based in all but four U.S. states to access its commission-free crypto trading services.

When Teven was asked if Robinhood would expand support to Shiba Inu (SHIB), the CEO suggested that it was unlikely anytime soon as he cited the firm’s stringent listing policy.

“We only offer seven coins currently. And I think it goes back to safety first, right. So we’re not generally going to be the first to add any new asset. We want to make sure that it goes through a stringent set of criteria,”

Speaking on the firm’s vision, Tenev argued that Robinhood offers a greater chance for financial inclusion than its competitors, as he asserted that its commission-free trading structure “changed the industry.”

“I think that, you look at cryptocurrencies, for instance, people are still paying 3%, 4% fees to access that market. You see a lot of opportunities to serve more customers that have even less money, who are even more underserved than the people we have now,” he said.