Financial services firm Robinhood announced Tuesday that it would lay off 23% of its staff, citing inflation as one reason for the move.
CEO and co-founder Vladimir Tenev said in a message to all employees that the company would be reorganized into a general manager structure, which would affect all roles, but particularly operations, marketing and program management functions. .
The reorganization “will flatten hierarchies, reduce cross-functional dependencies, and eliminate redundant roles and positions,” while around 23% of roles will be eliminated.
and the crypto market crash as two of the main reasons for the job cuts, as those issues have reduced client activity on the platform.
The company cut 9% of jobs earlier this year to combat costs at Robinhood, but the move “wasn’t effective enough,” the executive said.
“In this new environment, we are operating with more staff than we should. As CEO, I approved and took responsibility for our ambitious personnel journey, this is up to me,” Tenev said.
The businessman said that the additional staffing in 2021 came about because he believed that the trend in increased activity in the stock market and cryptocurrencies due to the pandemic would continue until 2022.
Employees who are laid off will be able to remain employed until early October and will receive a cash severance payment, payment of COBRA medical, dental and vision insurance premiums, and job search assistance.
“We know this news is difficult for all Robinhoodies, and we are also offering wellness support to those who want it,” Tenev said.
Robinhood’s announcement comes a week after Shopify said it would cut 10 percent of its workforce.