The financial services company's easy-to-use platform made it notorious early last year when many young investors trading from home participated in the GameStop stock short squeeze. Robinhood's platform has been used since then to help investors trade in other stocks and cryptocurrency assets. (Related: Desperate crypto investors scramble, beg to withdraw their money.)
The company recently announced that it was slashing approximately 23 percent of its workforce as part of a "reorganization." Most of the cuts will be in the company's operations, marketing and program management departments. This comes just after the company laid off nine percent of its workforce in April.
Tenev said the company would flatten its organizational structure to give general managers broader responsibility for Robinhood's businesses.
"Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022," wrote CEO Vlad Tenev. "Since that time, we have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash."
"As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me," he added.
Robinhood's mass layoff announcement was published a day before the company posted a 44 percent decline in revenues due to slumping trading activity and diminishing value in cryptocurrencies.
The company's transaction-based revenue during the second quarter fell to $202 million from $451 million it posted during the second quarter of last year. A drop of more than half.
Net revenue didn't paint a better picture at $318 million compared to $565 million a year ago.
The company's actual net revenue is also around $3 million less than its forecast of $321 million for the second quarter, but this is still up from its first quarter net revenue of $299 million.
The earnings report also showed a decline in monthly active users to 14 million, which is a 10 percent decline from the first quarter and a 33 percent decline from the second quarter of 2021, when the company reported having 21.3 million monthly active users.
Assets under custody also declined by a third from the first quarter to $64.2 billion. During the second quarter of 2021, the company reported having $102 billion in assets under custody.
The company went public in July 2021 at $38 per share. Its stock jumped to as high as $85 per share in its first month of trading alone. However, the stock quickly declined since then. Shares of Robinhood are down 48 percent year-to-date and closed at $9.23 per share on the day before the company announced its mass layoff.
Shares went down another two percent after the release of the company's second-quarter earnings.
Robinhood is not the only tech company to report a drop in earnings. Meta, Netflix, Google and other Big Tech companies are struggling to maintain the explosive growth they experienced during the pandemic.
Tesla, which purchased $1.5 billion worth of bitcoin earlier this year and started accepting it as a valid payment for car purchases, just revealed that it was selling off 75 percent of its bitcoin holdings. Cryptocurrency lending and exchange platforms Coinbase and BlockFi have implemented hiring freezes and laid off hundreds of staff each.
Learn more about the collapse of cryptocurrencies at CryptoCult.news.
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, talks about how the Federal Reserve's interest rate hikes will further crush cryptocurrencies.