Robinhood is laying off 23% of its workforce

Robinhood is laying off 23% of its workforce. The recent bear market brings many worries and complicated situations for the crypto industry. Several platforms closed shop, parting ways with their employees as their accounts went into the red. The second quarter results of almost all platforms associated with the cryptocurrency industry showed losses. Robinhood, a leading trading application, also suffers from this situation.

Robinhood forced to lay off 23% of its workforce

While Robinhood started out as a stock trading app, the addition of cryptocurrencies has brought it significant gains . This year, the platform took things a step further and decided to expand its cryptocurrency portfolio with the addition of Shiba Inu and, more recently, Chainlink.

While this was expected to boost the firm's revenue, things turned out differently following the recent cryptocurrency crash. Robinhood CEO Vlad Tenev posted a post revealing a new round of layoffs:

23% of Robinhood's workforce will be laid off, or about 780 employees. It's worth noting that this wasn't the first time this year that Robinhood has downsized. Just before the release of its first quarter results, the company had laid off 9% of its workforce. Citing the reason behind Robinhood's latest firing, Tenev wrote,

"We have seen a further deterioration in the macro environment, with inflation at a 40-year high, accompanied by a vast cryptocurrency market crash. This further reduced client trading activity and assets under custody."

Are cryptocurrencies really that good for Robinhood?

In March, Tenev claimed that several new cryptocurrencies would be introduced to Robinhood. In addition to that, he said:

"We want to make a huge investment and hire a ton of people. We will try to do it as quickly as possible. We might add new crypto along the way."

However, in his latest blog post, Tenev wrote:

"As CEO, I endorsed and took responsibility for our ambitious people trajectory - it's my fault."

Although Robinhood has added an array of cryptocurrencies, the latest crash and its current situation may limit the inclusion of other assets.
Additionally, the platform is currently under scrutiny by the New York State Department of Financial Services [NYDFS]. 

Robinhood's crypto unit has been hit with a $30 million fine for violating anti-money laundering and cybersecurity regulations. While the platform is in the midst of a wave of layoffs, the firm has been accused of being “understaffed .” With so many tragic events for Robinhood, it is assumed that the company will now keep a low profile.

Robinhood joins long list of struggling companies

Macroeconomic conditions and the crash of cryptos in recent weeks have resulted in a cascading downfall for many industry players. The collapse of the Terra ecosystem has dealt the fatal blow to many companies such as Voyager or the investment fund Three Arrows Capital . 

This degraded situation is much talked about because it concerns in particular major players in the industry until then, such as the Celsius lender. 

Forced into bankruptcy, the company recently presented a restructuring plan , but its image is badly damaged by this bankruptcy and the revelations including its incompetence, particularly in terms of risk management.

The big players are not spared since Coinbase in particular is experiencing a very complicated year 2022 with layoffs , a failure of its NFT marketplace and has just seen Binance pass it in terms of BTC held.

Binance, meanwhile, seems to be doing well despite recent statements from executives explaining the loss of revenue caused by the implementation of KYC. 

The FUD (Fear, Uncertainty and Doubt in other words fear, uncertainty and doubt) is spreading on the market at high speed. Recently it was the KuCoin exchange which had to deny rumors of massive layoffs.

This period is a life-size test for the crypto industry and its players who have grown so quickly that it is sometimes difficult for them to withstand the shocks linked to the market crash.

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