Robinhood cuts hundreds of jobs as wave of pandemic stock trading slows

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Stock trading app Robinhood plans to lay off 9% of its workforce, CEO and co-founder Vlad Tenev said in a blog post on Tuesday.

The company has been hiring fiercely as it has grown in popularity during the pandemic. But that expansion was too fast, leading to duplication of functions and other problems, Tenev said.

“This rapid headcount growth has led to duplicate work roles and functions, and more layers and complexity than is optimal. After carefully considering all of these factors, we have determined that these staff reductions of Robinhood were the right move to improve efficiency, increase our speed and ensure we are responsive to the changing needs of our customers,” Tenev said.

Between 2020 and 2021, Robinhood grew its staff from 700 to around 3,800, Tenev said. The layoffs mean Robinhood is cutting more than 300 workers.

Shares of Robinhood plunged more than 5% to a record low below $10 per share in late trading on Tuesday before rebounding slightly. The shares are down more than 70% from their starting prices.

Robinhood has grown at breakneck speed over the past two years thanks to massive business interest as the pandemic has kept people home and government stimulus checks have given them extra cash. But it has since lost momentum.

Monthly active users grew from 18.9 million in Q3 2021 to 17.3 million in Q4. In January, it forecast its first-quarter revenue to be 35% lower than the same period last year.

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