Retail trading platform Robinhood Markets Inc. said on Tuesday it is laying off about 9% of its full-time employees, sending its shares down 5% in extended trade. The Robinhood shares and crypto trading app is ending the month of April on a tense note. The company, which is reporting its quarterly results later this week, said the rapid headcount growth has led to some duplicate roles and job functions. Robinhood's easy-to-use interface has made it a hit among young investors trading from home on cryptocurrencies and stocks such as GameStop Corp during the COVID-19 pandemic.
In an official statement, firm's CEO, Vlad Tenev said, this rapid headcount growth has led to some duplicate roles and job functions, and more than optimal layers and complexity. After carefully considering all these factors, we determined that making these reductions for Robinhood's staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers.
Robinhood's growth was helped by young investors trading from home on cryptocurrencies and stocks such as GameStop Corp. and AMC Inc. during the COVID-19 pandemic. The company announced plans in March to extend trading hours for customers for extra six-and-a-half hours of trading daily.
Vlad Tenev also said that the company would contact every laid-off employee and help them decide their plans after the layoff, offer separation packages and help them find new jobs.
The company saw a loss of about 3.75% in today's market trading and another 5% in extended trading hours. During its growth period from 2019 to 2021, the company expanded its workforce from 700 to nearly 3,800.
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