Robinhood Bets That Massive Layoffs Will Offset Declines in Earnings and Customers
Robinhood is doubling down on price tag reduction as its income plummets and end users ditch the platform amid a bear market.
The inventory and cryptocurrency buying and selling app claimed second-quarter earnings late August 2, a day earlier than predicted. The report displays revenue for the three months ended June 30 fell 44 p.c from a 12 months ago to $318 million, missing analystsâ€™ estimate of $321 million. Right after fees, Robinhood reported a net quarterly decline of $.34 for each share, improved than the $.37 expected.
Times right before the earnings launch, Robinhood CEO Vlad Tenev introduced a prepare to lay off 23 p.c of the companyâ€™s workforce, affecting about 1,000 people.
Robinhood stock jumped extra than 14 percent this morning on the news.
In a letter to workforce, Tenev blamed â€œthe deterioration of the macro environment, with inflation at 40-12 months highs accompanied by a wide crypto market crashâ€ for the newest layoffs, which will mostly impact all those doing work in operations, advertising and program administration. It is Robinhoodâ€™s next round of downsizing following slashing 9 % of headcount in April.
Tenev explained worsening financial situations have minimized buyer buying and selling exercise and property below custody, or the full worth of assets held in person accounts.Â In the second quarter, Robinhood lost 1.9 million regular monthly lively customers. The platform experienced 14 million users at the stop of June.
Robinhood is expected to host a simply call with analysts this afternoon to focus on Q2 outcomes and an inside all-hands meeting on August 4 to tackle layoffs.