Although revenue from crypto increased somewhat this quarter, the online shopping broker faulted the economy for a fall in user growth and net revenue that plunged 44% year over year.
Online trading company Robinhood will let go of almost a quarter of its workforce, blaming a general crypto market meltdown and the macroeconomic environment’s continuous worsening.
The bad news was revealed in a blog post by co-founder and CEO Vlad Tenev on Tuesday, the same day the company disclosed mediocre Q2 financial results. Also, the New York State Department of Financial Services has imposed a $30 million penalty for the company’s cryptocurrency branch owing to alleged AML, cybersecurity, and consumer protection issues.
Tenev stated that the company’s operations, sales, marketing, and program management would be most affected by the layoffs, affecting about 23% of the workforce. The Financial Times reported that 780 employees would be affected.
Robinhood CEO Fired 23% Staff After Q2 Loss: Takes The Blame On Himself:
One day early than expected, the firm released its quarterly financial results. The results were disappointing, with $318 million in gross revenue, down 44% from a year ago but up 6% from the previous quarter. The net loss decreased from $502 million in Q2 2021 to $295 million.
In June, there were 14.0 million monthly active users, down 1.9 million from the previous quarter, and $64.2 billion less in assets under custody.
However, revenue from cryptocurrencies increased by 7% every quarter to $58 million.
Sam Bankman-Fried, the founder and CEO of FTX, spent $650 million for a 7.6 percent interest in Robinhood in May, which resulted in a huge increase in the stock price. According to Financial Times, Tuesday’s after-hours trade saw a more than 4% decline in stock values.