Retail trading company Robinhood announced that it will lay off 23% of its staff, which pushed its stock to decline by more than 3% during extended trading, and the company will also change its institutional structure in order to comply with only significant expenses, as described by CEO “Vlad Tenev”.
Robinhood cut its staff by 9% earlier in April, noting that the company’s growth has created duplicate jobs and careers, and Tenev stated that these measures were not enough, saying, “As CEO, I have agreed and taken responsibility for the ambitious path of the staff.” Read more [Possible Acquisition of Robinhood From the FTX Exchange].
Robinhood’s easy-to-use interface has helped young investors trade cryptocurrencies and stocks like GameStop from home during the COVID-19 pandemic, but the company has posted a dip in revenue as its client base struggles with high interest rates and inflation hitting record levels. Read more [Robinhood’s Revenue Falls as User Numbers Dwindle].
Separately, the New York state financial regulator has fined Robinhood’s crypto arm nearly $30 million after accusations of violating anti-money laundering and consumer protection laws. Read more [Sam Bankman Fred Buys a Stake in Troubled Robinhood].
The New York Department of Financial Services (NYDFS) stated that the Robinhood Crypto Business Project did not allocate sufficient resources to address cybersecurity risks and comply with laws, including the campaigns that took place in light of the explosion of the meme shares last year. Read more [GameStop shares rise 23%, driven by pressure on the shares for the second day in a row].