cloudyn.png
Wednesday August 17th, 2022 10:02PM

Robinhood cuts 23% of its workforce as fewer users trade

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — Robinhood Markets said Tuesday it's cutting nearly a quarter of its workforce, as crashing cryptocurrency prices and a turbulent stock market keep more customers off its trading app.

CEO Vlad Tenev said the company, whose easy-to-use app helped bring a new generation of investors to the market, will reduce its headcount by about 23%. The reduction of about 780 jobs follows another round of layoffs announced earlier this year, which cut 9% of its workforce and “did not go far enough” in cutting costs, Tenev said in a post on the company's blog.

The highest inflation in 40 years, and sharp hikes in interest rates by the Federal Reserve to combat it, have sent prices reeling across all kinds of financial markets, particularly those popular among Robinhood customers. Bitcoin has fallen to roughly $23,000 from its record of nearly $69,000, with prices crashing across the crypto ecosystem. Stocks on Wall Street, meanwhile, dropped more than 20% from their record to put the S&P 500 in what's called a bear market.

All that tumult means Robinhood saw its number of monthly average users drop, which hurts the company because it does best when its customers are trading a lot. The company based in Menlo Park, California, said it had 14 million monthly active users in June, down from 15.9 million three months earlier and from 21.3 million in last year's second quarter.

Altogether, Robinhood reported a net loss of $295 million, or 34 cents per share, for the three months through June. That's a narrower loss than the $502 million, or $2.16 per share, reported for last year's second quarter.

Revenue fell 44% from a year earlier to $318 million, but it was stronger than analysts expected.

Robinhood's growth has slowed sharply over the past year for a few reasons. A big one is that it was hard-pressed to replicate its blockbuster performance from the first half of 2021. At the time, manias around GameStop, other meme stocks and dogecoin all helped send Robinhood's revenue soaring.

But Robinhood is also contending with a world where pandemic restrictions have eased, meaning potential customers no longer have to spend as much time at home. And some smaller-pocketed, regular investors have pulled back from trading. They're called “retail investors” to distinguish them from the big professional investors called “institutional investors.”

“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022," Tenev said in his blog post. "In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me.”

Robinhood's stock has been mostly tumbling since its debut last year. It's nearly halved so far in 2022 and closed Tuesday at $9.23, up 2.1% for the day. It slipped nearly 1% in afterhours trading.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Wife of defense contractor claims stolen ID is her real name
The wife of a U.S. defense contractor, who together are charged in Hawaii federal court with stealing the identities of two deceased Texas infants and living under their names for three decades, says she's not the person prosecutors say she is
7:39PM ( 16 minutes ago )
Senate approves bill to aid vets exposed to toxic burn pits
The Senate has given final approval to a bill enhancing health care and disability benefits for millions of veterans exposed to toxic burn pits while serving in Iraq and Afghanistan
7:33PM ( 22 minutes ago )
Yankees get OF Bader from Cardinals for LHP Montgomery
The Yankees acquired Gold Glove-winning center fielder Harrison Bader from the St. Louis Cardinals for left-hander Jordan Montgomery ahead of Tuesday’s trade deadline, a surprising deal aimed at improving defense
7:19PM ( 36 minutes ago )
Associated Press (AP)
Sandy Hook parents: Alex Jones claims created 'living hell'
The parents of a 6-year-old boy killed in the Sandy Hook Elementary School massacre say conspiracy theorist Alex Jones made their lives a “living hell” by pushing claims that the murders were a hoax
6:40PM ( 1 hour ago )
US seeks possession of Venezuelan 747 grounded in Argentina
The U.S. Justice Department says it is seeking possession of a Venezuelan cargo jet that has been grounded in Argentina since early June because it was previously owned by an Iranian airline that allegedly has ties to terror groups
6:19PM ( 1 hour ago )
All eyes on ex-Missouri Gov. Eric Greitens in Senate primary
Former Missouri Gov. Eric Greitens hopes to complete a stunning political comeback as voters narrow the field for a pivotal spot in the U.S. Senate
6:14PM ( 1 hour ago )
AP Business
Starbucks reports record revenue as store count, prices rise
Starbucks reported record revenue in the April-June period, benefitting from hundreds of new stores and higher prices
5:20PM ( 2 hours ago )
Uber's stock surges on positive trends despite big Q2 loss
Uber’s effort meld its pioneering ride-hailing service with food and freight delivery showed signs of progress during the past quarter, even though the company sustained a huge loss stemming from a sharp decline in its outside investments
4:56PM ( 2 hours ago )
Stocks slip on Wall Street after another meandering day
U.S. stocks slipped Tuesday as Wall Street’s modest August retreat continued another day
4:32PM ( 3 hours ago )
AP Business - Corporate News
Wife of defense contractor claims stolen ID is her real name
The wife of a U.S. defense contractor, who together are charged in Hawaii federal court with stealing the identities of two deceased Texas infants and living under their names for three decades, says she's not the person prosecutors say she is
7:39PM ( 17 minutes ago )
Senate approves bill to aid vets exposed to toxic burn pits
The Senate has given final approval to a bill enhancing health care and disability benefits for millions of veterans exposed to toxic burn pits while serving in Iraq and Afghanistan
7:33PM ( 22 minutes ago )
Yankees get OF Bader from Cardinals for LHP Montgomery
The Yankees acquired Gold Glove-winning center fielder Harrison Bader from the St. Louis Cardinals for left-hander Jordan Montgomery ahead of Tuesday’s trade deadline, a surprising deal aimed at improving defense
7:19PM ( 36 minutes ago )
Trade deadline recap: Soto to Padres; Twins, Phillies add
Baseball’s trade deadline day was an action-packed affair — and no one had more fun than the Padres
7:18PM ( 37 minutes ago )
Indiana doctors raise worries about proposed abortion ban
Several doctors have told Indiana lawmakers that physicians fear they could face criminal charges when they provide emergency treatment for pregnant women if a proposal aimed at banning nearly all abortions in the state becomes law
7:08PM ( 48 minutes ago )