Robinhood CEO Vlad Tenev announced on Tuesday that the company will reduce its headcount by approximately 23% after recent turmoil.
The layoffs will fall heavily on operations, marketing and program management departments, according to Tenev. On a Tuesday afternoon call with reporters, the CEO provided further context and took the blame for the situation.
“The reality is we overhired… I approved and took responsibility for how we staffed in the past couple of years,” said Tenev. “I anticipated that what we saw in 2020 and 2021 in terms of market conditions would last longer than it turned out to last.”
All of this comes a day before Robinhood planned to announce second quarter earnings, and at a time when the company’s share price has been in a prolonged slump. After going public at $38, Robinhood shares briefly soared but have been trading below $10 for months.
In light of the lay-off news, Robinhood chose to issue its earnings a day early. The company announced revenues from options and equities transactions had declined, but that crypto revenue was up 7%.
Robinhood’s woes have come as the company has figured out to translate a surge in trading during the pandemic, including a rush among customers to buy crypto, into a long-term business strategy. The challenge has been especially acute as trading volumes across all markets have dropped significantly.
In a blog post published Tuesday afternoon, Tenev also cited “additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.”
This story was updated several times to reflect breaking developments.
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