Tenev said that 9% of its full-time employees would be laid off.
It looks like this cut may affect some 300 people according to calculations, as it was reported earlier this year that there were 3,400 employees.
The value of the U.S. consumer investing and trading service company peaked at $85 per share before it fell to $10 per share. The market was lower today, overall, and another 5% in after-hours trading, as a result of its layoff announcement.
The company saw its value rise 25% in March after news that it was extending its equity trading hours toward a goal of supporting 24 hour-a-day activity. In November of last year, the company announced a data breach that affected millions of its users.
Robinhood’s stock pops 25% on news of extended trading hours
We reported earlier this month that both Robinhood and Coinbase were lucky to go public when the markets were good. They had to debut when the market was hot. As they are repriced daily, they don't have a huge, illiquid price tag on their chest that they now have to live up to in a later IPO.
In a post today, Tenev described the company's last two years as "hyper growth accelerated by several factors." In order to meet customer and market demands, we grew our staff by 6X from 700 to 3800.
He wrote that with growth comes more job openings to manage that growth, which resulted in some roles and job functions being duplicated.
After carefully considering all these factors, we decided that it was the right decision to reduce the staff at Robinhood.
The company is expected to report its financial performance in the next few days. According to the company's IR page, the company's decision to axe a large portion of its staff could be a way for it to get ahead of investor disfavor.
According to Yahoo Finance, analysts expect the company to report a Q1 loss of $0.36 per share against revenue of $355.78 million.
The company was very effective at attracting external capital during its boom, but as the 2020-2021 savings and investing boom faded, the company's value eroded. It's not clear how it will manage a period of less growth. If the company manages to match current expectations for its most recent quarter, it will have earned a negative year-over-year growth rate.
In regular trading today, the value of the American consumer trading service was lower than in the after-hours. The growth of both companies was due to consumer trading activity. It could affect investor confidence in the pending Q1 results.
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