Robinhood Co-founder Vlad Tenev announced that the company would be firing 9% of their full time employees by eliminating the duplicate positions they had previously added during a period of hyper-growth in 2020. The devastating news does not seem all that surprising, considering the state of the market right now and the sudden decline.
ROBINHOODS RAPID GROWTH
During the Covid-19 Pandemic Robinhood had a surge in growth on the trading platform. Young retail investors were looking to take advantage of the market dip and were also receiving stimulus checks that they were looking to deploy into the market. The increase increase in popular meme stocks such as AMC and GME also gathered an influx of new retail investors to the trading platform. From 2019-2021 Robinhood’s revenue increased from $278 million to $1.8 billion. In response to the rapid growth Robinhood was seeing, they expanded by adding extra jobs and duplicate roles to the company. They went from 700 employees to 3800 employees. Additionally the company went public in July 2021 at $38 per share. The share price reached $85 per share but has since been on a decline and since the news of laying off employees and has fallen below $10 a share.
Since the hyper growth period, the company has since announced that they will be laying off 9% of employees in order to reduce complexity and increase efficiency within the company. In addition to the lay offs, we’re expecting a Q1 earnings call today from Robinhood. The last two earnings calls from Robinhood have been missed and today expected earnings are to be $357.21 million. Should the brokerage company miss again, we could see the stock price fall even lower.
Co-found Vlad Tenev states, “While the decision to undertake this action wasn’t easy, it is a deliberate step to ensure we are able to continue delivering on our strategic goals and furthering our mission to democratize finance.” Tenev reassured the public that they would be contacting each laid-off employee individually to help them decide their next plans, find new jobs and help with offer separation plans.
While Robinhood is downsizing the number of jobs, they insist that they will continue to expand in other dimensions, such as introducing new brokerage, crypto and spending/saving products. The company and its users currently account for 1/3 of all Dogecoin in circulation. CEO Vlad Tenev believes that Dogecoin (DOGE) could be “the future currency of the internet and the people”.