Robinhood, NASDAQ: $HOOD, the popular trading app popularized by the meme stock trading frenzy in early 2021, where retail investors and Redditors banded together to rally the price of failing companies such as video game retailer Gamestop and the movie theater chain AMC.
The company said on Tuesday that it has planned on laying off around 23 percent of its employees. This news comes after Robinhood had its crypto unit fined $30M by the Department of Financial Services amid an investigation into anti-money laundering violations.
Robinhood’s CEO and co-founder Vlad Tenev shared a blog post relaying the news of the company reorganization and headcount reduction. Tenev also mentions that employee layoffs will be concentrated in operations, marketing, and program management functions.
Tenev blamed the headcount reduction on reduced customer trading activity, citing a deterioration in the macro environment, 40-year high inflation, and a broad crypto market crash.
This news follows Robinhood’s recent job cuts, which occurred in April, where they laid off nearly 9% of their staff.
Robinhood Crypto Division Hit With $30M Fine
Under investigation for failure to provide adequate compliance measures resulted in a significant amount of anti-money laundering and cybersecurity violations by Robinhood, said the Department of Financial Services. The Department of Financial Services has ordered Robinhood on Tuesday to pay a $30M fine to the state of New York and retain an independent consultant who shall monitor the company’s regulatory compliance mesures.
Robinhood’s stock price has experienced an 80% correction YOY after dealing with the fallout of the collapse of the crypto market and a worsening economy.
This layoff follows the recent trend in fintech companies downsizing as significant players involved in trading, such as Coinbase, OpenSea, Gemini, Crypto.com, and many more, have had to reorganize and restructure after the broad cryptocurrency economy fell from a high of $3T in late 2021 to nearly $1T.