The latest cuts, which will affect 780 employees, continue a massive freefall for the once-booming online brokerage. In a separate development on Tuesday, New York state hit the Menlo Park, Calif., company with a $30 million fine. -high inflation coupled with a fall in cryptocurrency: has reduced the company’s client trading activity and assets under custody. In its second-quarter earnings report, also released Tuesday, the company showed a 44% drop in revenue from a year ago. Robinhood’s monthly active users in June decreased by more than 7 million, or 34%, and assets under custody decreased by more than $37 billion, or 37%, from the second quarter of last year. he added, it was tailored for a continuation of the high-growth crypto boom of the pandemic era.
“Last year, we took many of our operations roles under the assumption that the increased retail engagement we had seen with the stock and crypto markets in the era of COVID-19 would persist through 2022,” Tenev wrote in a message to employees. “In this new environment, we are operating with more personnel than appropriate.”
He added: “As chief executive, I approved and took responsibility for our ambitious staff trajectory – that’s down to me.”
The layoffs will affect employees across all company functions, with operations, marketing and program management positions hardest hit, he said. The company planned to notify all employees via email and Slack on Tuesday with their status and resources if they were affected.
Separately on Tuesday, the New York State Department of Financial Services fined the cryptocurrency arm of Robinhood $30 million for allegedly violating reporting requirements related to anti-money laundering and cybersecurity regulations.
“As its business grew, Robinhood Crypto failed to invest adequate resources and attention to develop and maintain a culture of compliance, a failure that resulted in significant violations of the department’s cybersecurity and anti-money laundering regulations,” Adrienne A. Harris, the department’s superintendent said in a statement.
Correction: An earlier version of this story misstated the percentage decline in Robinhood’s assets under custody. These fell by 37% in the second quarter.