In order to streamline the costs further amid the decline in monthly active users on the platform, online trading brokerage Robinhood (HOOD) is laying off 780 workers — which is about 23% of its employees.
Last year, Robinhood CEO Vlad Tenev claimed that the company was staffed with expectations of an ongoing robust retail engagement in both the stock and crypto markets. However, the assumptions were proven false due to the crashes in both markets.
This year, it is the second round of the company’s layoffs. Earlier, the workforce was trimmed by 9%.
Based on a filing, Aparna Chennapragada has resigned from his role as Robinhood’s Chief Product Officer but will continue to serve as CEO’s advisor through January 2.
The earnings of Robinhood are currently in the red. According to the second quarter report, the revenue from transaction-related is falling to $202 million, or 7% decrease in value.
Additionally, equities revenue and options dropped by 19% and 11%, respectively. The crypto was the only saving grace, with revenue up $58 million, or 7% increase in value.
The monthly average users (MAU) fell significantly, to 14 million from 15.9 million in the first quarter. In the second quarter of 2021, MAUs peaked at 21.3 million.
In the second quarter, Adjusted EBITDA suffer a loss of $80 million, though this loss is less than from a quarter earlier which the loss was $143 million. The company said that they will “continue to challenge ourselves to reach a positive run-rate for Adjusted EBITDA by the end of 2022.”
The company estimated the financial restructuring and related charges employee severance and benefits costs to be between $30 million to $40 million.
Later this year, Robinhood said that it still plans to launch its non-custodial crypto wallet.
In postmarket trading, HOOD shares are down around 3%. After the close of trading on Wednesday afternoon, the company earnings call is set.
