Bay Area-based Robinhood is laying off nearly a quarter of its staff
Robinhood, the controversial and nascent equities and cryptocurrency technology company headquartered in the Bay Area, announced mass layoffs the same day it was hit with a $30 million fine. by New York State.
Twenty-three percent of Robinhood’s workforce, or about 800 of its roughly 3,400 employees, will be laid off, Robinhood co-founder and CEO Vlad Tenev said in a blog post on Tuesday. The staff cuts will primarily affect Robinhood’s operations, marketing and program management divisions.
Tenev blamed the layoffs on overstaffing in 2021, which he attributed to “the assumption that the heightened retail engagement we’ve seen with the stock and crypto markets in the COVID era will persist through 2022”. The company also went public in 2021.
“As CEO, I have endorsed and taken responsibility for our ambitious staffing trajectory – it’s on me,” he wrote.
The Menlo Park company will now undergo organizational restructuring, with the managing directors taking over the “individual businesses”.
The news comes as Robinhood’s crypto division faces a $30 million fine from the New York State Department of Financial Services for “significant failures” to comply with state anti-virus regulations. against money laundering and cybersecurity for “virtual currency companies”. The agency said Robinhood’s compliance program was understaffed and under-resourced while falsely certifying compliance.
The laid off employees were notified on Tuesday. They have the option to remain employed until September – and will also receive cash severance, COBRA payments and job search assistance, although a company spokesperson declined to comment when asked about the duration of cash payments and health care for laid-off employees.
Robinhood is one of the first tech companies, but likely not the last, to announce a second round of layoffs in 2022. In April, Robinhood cut 9% of its workforce. (“It didn’t go far enough,” Tenev said in the blog post.) These layoffs continue during tough economic times for the tech industry, with giant corporations announcing missed revenue targets. and investors shunning funding for risky new start-ups. Earlier this week, Oracle announced massive layoffs.
The company will hold an internal all-staff meeting on Thursday.
Heard about something happening at a Bay Area tech company? Contact Joshua Bote securely at joshuareybote@proton.me or on Signal at 707-742-3756.
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