29.2 C
Washington
Tuesday, September 27, 2022

Robinhood has announced that it would lay off 9 percent of its workforce

Robinhood, the app that made free one-click trading of stocks and options popular, said on Tuesday that it was letting off around 340 individuals, or approximately 9 percent of its 3,800 employees, as a result of the company’s restructuring.

In a blog post, Vlad Tenev, the chief executive of Robinhood, said that the firm had effectively overhired during the epidemic period. Since 2020, the company’s work force has increased by almost six times, from 700 to 3,800 individuals, resulting in duplicate positions and job tasks as well as “more layers and complexity than are desirable,” according to the company’s CEO.

After carefully analysing all of these variables, Mr. Tenev concluded that “reducing the number of Robinhood employees is the best solution for improving efficiency, increasing our velocity, and ensuring that we are responsive to the changing demands of our clients.”

One of the most controversial aspects of the Silicon Valley company’s one-click trading, particularly in risky products such as options, has been its commission-free model. The company grew quickly and caused significant disruption among competitors, including E-Trade and other brokers, due to the ease with which it could be used and the lack of fees. However, some critics questioned whether it encouraged unhealthy behaviour, particularly among young and inexperienced individual investors.

The “meme” stock craze, which erupted in early 2021 and saw groups of individual investors banding together to pump up the prices of several out-of-favor firms, notably GameStop, was a source of concern for Robinhood. A large number of people utilised Robinhood to execute their transactions.

Robinhood had to pause certain trading and raise rounds of emergency financing to pay the collateral required for its clients’ trades, which resulted in the suspension of some trades. The police took Mr. Tenev’s smartphone as part of their investigation into the circumstances surrounding the incident. Robinhood has been sued more than 50 times, and Mr. Tenev has been invited to appear before the United States House of Representatives.

In July 2021, the firm will go public on the stock market. Despite an increase in sales of 89 percent to $1.82 billion, the company lost $3.69 billion in the previous year.

Jonathan James
I serve as a Senior Executive Journalist of The National Era
Latest news
Related news

LEAVE A REPLY

Please enter your comment!
Please enter your name here