Robinhood Markets (NASDAQ: HOOD) is laying off 7% of its employees as the online brokerage firm struggles with declining trading activity.
With about 2,300 employees, according to its annual report last year, Robinhood will dismiss just over 150 people. This follows two layoff rounds the previous year in which the California company axed over 1,000 people.
In a memo seen by the Wall Street Journal, Chief Financial Officer Jason Warnick said the latest layoffs will allow the company to “adjust to volumes and to better align team structures.”
In a statement following the WSJ report on Monday, a spokesperson for the company declined to acknowledge the layoffs but said the company was making changes to its team.
“We’re ensuring operational excellence in how we work together on an ongoing basis. In some cases, this may mean teams make changes based on volume, workload, org design, and more.”
The most affected departments include customer experience, trust and safety, platform-shared services, and productivity.
Robinhood, like many other companies in the tech world, has been a victim of its success. During the pandemic, billions flocked online to interact, communicate, and in Robinhood’s case, bet on stocks and digital assets. The company hired aggressively to meet this demand. However, this surge in demand has declined, and these companies have laid off millions of employees.
According to one database, over 1,000 tech firms announced layoffs last year, with 800 more axing employees in the first six months of 2023.
For Robinhood, the overall stock trading slowdown has been compounded by a steep decline in digital asset revenue as the prices of most tokens tanked. In Q1 this year, the platform’s digital asset trading revenue dipped 30% to $54 million from a similar period last year.
The company has been diversifying its product line to reduce reliance on digital assets and stocks. Last week, it announced the purchase of credit card company X1 in a deal worth $95 million.
Watch: What’s next for digital asset exchanges & investment?
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