Digital broker Robinhood has announced that, as part of a restructuring, it will close two offices and reduce its workforce by about 23%, representing about 780 people.
The move follows previous layoffs in April when the trading app let 9% of its staff go.
Robinhood CEO partially blames inflation for 23% cut in workers
The company’s CEO, Vlad Tenev, partially blames inflation and a broader cryptocurrency crash for declining trading volumes. In a blog post, Tenev shared information about the reasons behind the layoffs. He said:
“Earlier this year, I announced that we would be letting go of 9% of our workforce and focusing on greater cost discipline across the organization. This didn’t go far enough.
“Since that time, we have seen a further deterioration in the macro environment, with inflation at its 40-year high, accompanied by a broad crypto market crash. This has further reduced the trading activity of clients and assets in custody.”
Organizational structure changes
The CEO talked about the company’s mandate to encourage greater cost discipline and accountability, which he said highlights the need for Robinhood to change its organizational structure.
“We are moving to a General Manager (GM) structure, where GMs take broad responsibility for our individual businesses. This change will flatten hierarchies, reduce cross-functional dependencies and remove redundant roles and positions,” Tenev said.
Robinhood isn’t the only high-profile company in the US to announce major layoffs of staff in recent months.
Twitter announces layoffs
In July, Twitter announced it would lay off 30% of its talent acquisition team. The announcement came two months after a company-wide staff freeze. Twitter employees have reportedly expressed concerns about potential layoffs in response to the macroeconomic environment. In a meeting with employees, the short-lived CEO of Twitter, Elon Musk, had said:
“Right now the costs are higher than the revenues. That’s not a great situation.”
Microsoft makes redundancies
On July 12, Microsoft announced it would be cutting jobs amid growing economic uncertainty. In an email to Bloomberg, Microsoft said:
“Today we had a small number of role eliminations. Like all companies, we regularly review our business priorities and make structural adjustments accordingly.
“We will continue to invest in our business and grow the overall workforce over the coming year.”
As Tech Crunch reports, tech layoffs have accelerated in recent months as investors fear a recession and then pull back.
Google slows recruitment pace for the rest of the year
Amid decades of high inflation and ongoing pressures on businesses from the Ukraine crisis, Google has also said it would slow the pace of hiring for the remainder of 2022.
Google CEO Sundar Pichai told employees the company needs to be “more entrepreneurial” and will have to operate with “greater urgency”, sharper focus and more hunger than we’ve shown on sunnier days.
With inflation rising, many small business owners are also being forced to find ways to save money, as rising costs lead to tighter profit margins. Budget cuts often include reducing inventory and marketing activities, and, as we’ve seen with many of the tech giants in recent weeks, layoffs of staff.
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This post Robinhood CEO partially blames inflation for 23% cut in workers
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