Financial app Robinhood will lay off 23 percent of its workforce, with employees from all divisions potentially impacted.
“Earlier this year, I announced that we would be letting go of 9 percent of our workforce and focusing on greater cost discipline throughout the organization. This did not go far enough,” CEO and co-founder Vlad Tenev wrote in a corporate blog posting. “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. This has further reduced customer trading activity and assets under custody.”
Robinhood previously planned for “heightened retail engagement” in the stock and crypto markets to persist well into 2022. That level of activity hasn’t sustained, meaning the company is now “operating with more staffing than appropriate,” Tenev added.
Robinhood exploded in use during the COVID-19 pandemic as millions of housebound customers used the app to invest in “meme stocks” and other equities. With that spike in popularity (at one point, the app reportedly had 16 million active users), its software engineers wrestled with keeping the platform up and running. At one point, Robinhood paid its technologists high salaries in exchange for dealing with these huge challenges: levels.fyi, which crowdsources compensation data, estimated that the company’s entry-level software engineers could earn nearly $200,000 per year in stock, salary and bonuses.
The current turmoil in the markets has impacted a number of fintech companies, including Coinbase, Robinhood, and many smaller apps focused on the cryptocurrency market. Despite that chaos, the tech unemployment rate stood at 1.8 percent in June, well below the overall national unemployment rate of 3.6 percent. According to CompTIA, which crunched data from the U.S. Bureau of Labor Statistics (BLS), employers posted some 505,663 open tech jobs that month, a year-over-year rise of 62 percent.
Perhaps that’s heartening news to any technologist who wants to jump out of fintech for another technology segment (or even an altogether different industry). Those departing Robinhood may soon find new opportunities, but in the meantime, they’re allowed to stay onboard until the beginning of October with regular pay and benefits.