Benzinga - Robinhood Markets Inc (NASDAQ: HOOD), is cutting about 7% of its full-time staff in response to a slowdown in customer trading activity and reduced customer engagement.
As reported by the Wall Street Journal, the company is making these layoffs to adjust to volumes and align team structures. The decrease in customer trading activity and engagement could be attributed to factors such as higher costs of commodities and a downturn in the cryptocurrency market.
This is Robinhood's third round of layoffs in just over a year. The company previously cut more than 1,000 jobs in two rounds of layoffs in 2022. The restructuring affected roles in customer experience, platform shared services, customer trust and safety, and safety and productivity. The company experienced an uptick in employees voluntarily leaving and declines in reported employee job satisfaction following the layoffs in 2022.
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The layoffs come shortly after Robinhood announced its agreement to acquire credit-card startup X1 in a $95 million cash deal, indicating the company's move to expand its product offerings beyond trading.
Robinhood had a significant rise in popularity during the COVID-19 pandemic, attracting millions of users for stock, options and cryptocurrency trading. But by May 2023, the company reported fewer than 11 million monthly active users, and its transaction-based revenue dropped 5% year-over-year in the first quarter of 2023.
Despite the layoffs, Robinhood's shares are up about 18% this year, but still down about 86% from a record high shortly after the company's public debut in 2021.
HOOD Price Action: Shares of Robinhood closed Monday up 1.48% at $9.63, and were up in after-hours 0.93% at $9.72.
This article was generated using ChatGPT and was reviewed and edited by a Benzinga editor.
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