Robinhood CEO Vlad Tenev said in a blog post Tuesday that the “dual roles and job functions” are one of the reasons the company decided to lay off the employees.
Robinhood has announced that 9% of its full-time employees have been laid off as the company downsizes after rapid expansion in recent years.
Founded in 2013, the trading app says its headcount has grown exponentially through 2020 and the first half of 2021. As customer demand increased due to the pandemic lockdowns, tax incentives and low interest rates, the company’s full-time workforce skyrocketed from 700 to 3,800.
Dual roles were a factor
Vlad Tenev, CEO of the company, said in a blog entry on Tuesday, this rapid growth had inevitably led to “Duplicate roles and job functions, as well as more levels and complexity than optimal.”
It’s those factors that the company considered when making the difficult decision to lay off the employees, he added.
“We have concluded that this reduction in Robinhood’s workforce is the right decision to improve efficiency, increase our speed and ensure we are responsive to the evolving needs of our customers.”
Robinhood strives to achieve strategic goals
According to the CEO, the layoffs are a “conscious move” to ensure the company continues to meet its strategic goals. It should also further advance its goals in the democratization of the financial system.
“We will continue to accelerate our product momentum through 2022, introducing important new products in brokerage, crypto and spending/saving,” he wrote.
In the last two years, Robinhood has grown its net user accounts from 5 million to 22 million. Revenue also grew from about $278 million in 2019 to more than $1.8 billion in 2021. GameStop and Dogecoin were among the top two most traded assets on the trading app.
The company, which went public last year, reportedly has over $6 billion in cash in its account. The US-based company will release its first-quarter results on Thursday.
Robinhood shares fell sharply following the announcement, with the company’s shares down 3.75% by the close.
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