Robinhood Lays Off 300 Full-Time Workers As The Stock Loses 4.9% In a Day

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Shares of Robinhood on Wednesday declined to their lowest price following the trading platform’s plans to reduce its workforce after the pandemic-fueled trading frenzy started reaching its threshold. 

Stock in the company valued at nearly $9 billion ended down by 4.9% at $9.51. Robinhood went public in July 2021 and closed its first trading session at $34.82. 

The trading platform’s  CEO and co-founder Vlad Tenev in a blog post late Tuesday said it would give up 9% of its full-time employees. Tenev expanded the staff to around 3,800 from 700 between 2020 and 2021. The reduction amounts to 300 workers

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“This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal,” said Tenev in describing a period of “hyper-growth” accelerated by COVID lockdowns, low-interest rates, and economic stimulus checks sent to millions of Americans by the federal government.

News of lay-offs arrived before Robinhood released its 1st quarter earnings report on Thursday. Analysts polled by FactSet expect Robinhood to post a narrower per-share loss of $0.38 a share on a 32% revenue decline to $355 million from $522 million a year earlier. 

The stock dipped instantly following the release of the fourth-quarter results in January as Robinhood forecast first-quarter revenue of “less than $340 million,” which was lower than Wall Street’s average projection of $448 million.