Robinhood announced on Tuesday that it will be cutting around 9% of its full-time workforce, according to a statement from CEO Vlad Tenev.
"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," said Tenev (via Bloomberg).
The company says it will continue to scrutinize headcount growth targets.
Robinhood CEO Vlad Tenev shared the below to Robinhood employees following a company-wide meeting to discuss the changes (emphasis ours).
Today we made the difficult announcement that we are letting go approximately 9% of our full-time employees. While this decision was necessary, it was not one we undertook lightly, and I’d like to share our rationale.
As you know, throughout 2020 and H1 2021, we went through a period of hyper growth accelerated by several factors including pandemic lockdowns, low interest rates, and fiscal stimulus. We grew net funded accounts from 5M to 22M and revenue from ~$278M in 2019 to over $1.8B in 2021. To meet customer and market demands, we grew our headcount almost 6X from 700 to nearly 3800 in that time period.
This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal. 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.
While the decision to undertake this action wasn’t easy, it is a deliberate step to ensure we are able to continue delivering on our strategic goals and furthering our mission to democratize finance. We will continue to accelerate our product momentum through 2022 and will introduce key new products across Brokerage, Crypto, and Spending/Saving. We will retain and continue to hire exceptional talent in key roles and provide additional learning and career growth opportunities for our employees. And of course, our international expansion efforts will continue to accelerate from here.
Our financial position remains strong with over $6B in cash on our balance sheet. To keep it that way we’re anticipating and being responsive to changes in the way our customers invest- especially during this time of global conflict, economic uncertainty, and high inflation. We are also scrutinizing our headcount growth targets, and making sure that we continue to prioritize internal opportunities for automation and operational efficiency that serve our customers. Doing so enables us to be more resilient in hard times, and stronger during the good.
To our departing colleagues, thank you for all that you have done in support of Robinhood and our mission, and we wish you well in the future. We will begin reaching out to each of you individually to discuss the next steps, including the significant support we will provide around separation packages, healthcare, and job search assistance. To the rest of the team, thank you in advance for your ongoing commitment to Robinhood’s mission and the hard work that will be required to achieve it.
In the seven years since Robinhood launched, we have already disrupted the massive retail brokerage industry in the United States. We did this with a lean team and radical customer focus. I remain steadfast in my commitment to you, to our customers, and our mission, and I will not rest until everyone in the world has access to simple, low cost financial services.
News of the cuts come just one quarter after we noted the company was under intense downside pressure, following dismal guidance the previous quarter.