The retail trading platform Robinhood Markets Inc., which went through a hyper-growth period boosted by the meme stock frenzy during the COVID-19 pandemic, is experiencing a pullback.
The company is laying off about 9% of its full-time employees.
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The news sent shares down 5% in extended trading.
The company’s total headcount was 3,800 at the end of 2021.
Robinhood CEO Vlad Tenev made the announcement in a blog post following a company meeting.
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“This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal,” said Teney. “After carefully considering all these factors, we determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers.”
Robinhood’s growth was helped by young investors trading from home on cryptocurrencies and stocks such as GameStop Corp. and AMC Inc. during the COVID-19 pandemic.
The company announced plans in March to extend trading hours for customers an extra six-and-a-half hours of trading daily.
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“We will continue to accelerate our product momentum through 2022 and will introduce key new products across brokerage, crypto and spending / saving,” said Tenev.
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The company’s revenue rose 14% in the fourth quarter from a year ago, less than half its growth rate in the summer months.
Robinhood also warned that revenue in the current quarter could sag sharply from a year earlier.
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The company will report its quarterly results this week.