The CEO of the financial services company announced Tuesday that it would lay off 9% of its full-time employees in the wake of a drop in active users.
There is a CEO in an office.
The company's first-quarter earnings report will be released after the closing bell.
Tenev said in a message to employees that the company grew from 700 to nearly 3,800 employees because of modest interest rates, governmentStimulus and the rise of app usage.
Tenev said that the current layoffs were caused by the redundant employee roles created by the burgeoning headcount.
After the layoffs were announced, the stock fell by 4.8% to $9.52 in after-hours trading.
Tenev said the company would contact laid-off employees individually to discuss their next steps, and would offer support in the form of separation packages and help with job searching.
The growth of the app was due to the fact that Americans were online during the Pandemic lockdowns. The company's stock price went up more than 600% in a matter of days, reaching a high of $70.39 on August 4. Its shares have sunk since, because of a decline in retail trading. The company's active user base fell from 18.9 million in the third quarter to 17.3 million in the last quarter. Goldman Sachs analyst Will Nance urged investors to sell, saying that the company had a limited path to near term profitability due to sluggish user growth.
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