Robinhood, the app that popularized free one-click stock and options trading, said Tuesday it was laying off about 340 people, or about 9% of its 3,800 employees.
Vlad Tenev, chief executive of Robinhood, said in a blog post that the company has essentially overhired during the pandemic. Since 2020, the company’s headcount has grown nearly sixfold, from 700 to 3,800 people, resulting in duplication of job roles and functions and “more layers and complexity than is optimal “, did he declare.
Mr. Tenev added that “after carefully considering all of these factors, we have determined that these Robinhood staff reductions were the right decision to improve efficiency, increase our speed and ensure that we meet the changing needs of our customers. clients”.
He said the company was financially strong, with $6 billion in cash.
Robinhood did not immediately respond to a request for comment.
The Silicon Valley company has long come under scrutiny for its commission-free one-click trading, especially for riskier assets such as options. It grew rapidly and confused rivals, including E-Trade and other brokers, with its ease of use and lack of fees, but critics questioned whether it was fueling unhealthy behavior, by particularly among young and unsophisticated individual investors.
In early 2021, Robinhood was caught up in the “meme” stock frenzy, when groups of individual investors banded together to drive up the prices of some underserved stocks, including GameStop. Many have used Robinhood to make their trades.
Robinhood had to halt some transactions and raise emergency funding to cover the collateral needed for its customers’ transactions. Mr Tenev’s mobile phone was seized by authorities as part of an investigation into the situation. Robinhood has been sued over 50 times and Mr. Tenev has been called to testify in Congress.
The company went public in July 2021. It lost $3.69 billion last year, although its revenue rose 89% to $1.82 billion.