Robinhood CEO Vlad Tenev said in a blog post Tuesday that “duplicated roles and job functions” were among the reasons the company decided to cut staff.
Robinhood announced that 9% of its full-time workforce was laid off as part of a downsizing effort following rapid expansion over the past couple of years.
The trading app, founded in 2013, said headcount grew dramatically through 2020 and the first half of 2021. As customer demand surged during the pandemic, aided by fiscal stimulus and low interest rates, full-time employees rose from about 700 to 3,800.
Duplicated roles were a factor
Vlad Tenev, the company’s chief executive, said in a blog post on Tuesday that rapid growth had “inevitably led to duplicated roles and job functions, and more layers and complexity than is optimal.”
He said those issues were among the considerations behind the difficult decision to reduce staff.
” We determined that making these reductions to Robinhood’s workforce is the right decision to improve efficiency, increase our speed, and ensure we are responsive to customers’ changing needs,” he wrote.
Robinhood focused on delivering strategic goals
According to the CEO, the layoffs were a “deliberate step” to ensure the company can continue delivering on its strategic priorities.
” We will continue to accelerate our product momentum through 2022 and will introduce new key products across brokerage, crypto, and spending/savings,” he added.
Over the past two years, Robinhood grew its net user accounts from 5 million to 22 million. Revenue also climbed from roughly $278 million in 2019 to more than $1.8 billion in 2021. GameStop and Dogecoin were among the platform’s most traded assets.
The company, which went public last year, reportedly has over $6 billion in cash on its balance sheet. The U.S.-based firm is set to release first-quarter results on Thursday.
Robinhood shares fell following the announcement, with the stock down 3.75% at the market close.