The Zhitong Finance APP noted that less than a year after its listing, 9% of Robinhood Markets Inc (NASDAQ: HOOD) (HOOD.US)’s 3,800 employees faced layoffs. The company said that after “high growth” and heavy hiring in 2020 and early 2021, the company has a lot of overlapping roles.
The company’s chief executive Vlad Tenev said in a statement on Tuesday: “The rapid growth in the number of employees in the past has led to some duplication of roles and job functions in the company’s positions, resulting in a less than ideal employee structure.” It is understood that the stock price trend It has plummeted 74% since its listing last year, and the trend has almost collapsed.
The main reason behind the surge in popularity of the online brokerage during the pandemic is that the app has been favored by new entrants to the market, who like to trade some risky assets on the app, including Meme shares and cryptocurrencies. But transaction activity, the company’s main source of revenue, has fallen, and even its recent launch of a slew of new features, including a cryptocurrency wallet and debit card, has failed to stem the decline.
It is understood that Robinhood plans to report first-quarter results after the U.S. stock market closes on Thursday, and its revenue in the first two quarters has missed market expectations and has accumulated losses of more than $2 billion since its IPO.
Retail investor participation in the stock market is starting to decline, a new conundrum for Robinhood and other brokerages. About 17% of U.S. stock market volume in early March came from retail investors, down from a peak of 24% in the first quarter of last year, according to estimates by Bloomberg Intelligence analysts Jackson Gutenplan and Larry Tabb.
Although, Robinhood’s commission-free approach caters to the needs of a segment of retail investors and drives its growth, most of whom have been “abandoned” by some established brokerages because of their low capital. As of last year, the median account balance of Robinhood users was just $240. But competitors then caught up, and commission-free trading is now standard practice in the industry.
At the same time, because Robinhood is spending a lot of money on new features, it doesn’t have the same buffer against sluggish market activity as others in the industry.
As of press time, the stock’s share price fell 2.60% after hours to $9.740 per share.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/9-of-robinhood-employees-who-are-underperforming-face-layoffs/
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