Robinhood Takes Drastic Measure Amid Plummeting Stock Prices The former unicorn experienced massive growth during the pandemic, but hasn't sustained it since.

By Amanda Breen

entrepreneur daily

U.S. consumer investing and trading service company Robinhood once enjoyed unicorn status, then went public at $38 per share in July 2021, reaching $85 per share at its peak. But that value has since tumbled below $10 per share, and on Tuesday, CEO Vlad Tenev announced that the company would lay off 9% of its full-time employees.

Per Reuters, Robinhood had 3,400 employees earlier this year, and while the report didn't distinguish between full-time and contract employees, according to TechCrunch's calculations, the new workforce cuts will impact roughly 300 people.

Related: How to Tell If Your Data Was Leaked in Robinhood's Massive Security Breach, and What to Do to Protect Yourself

In a letter shared with Robinhood employees after a company-wide meeting, Tenev cited pandemic lockdowns, low interest rates and fiscal stimulus as factors in the company's rapid growth, noting that net funded accounts climbed from five million to 22 million in 2021, with revenue skyrocketing from approximately $278 million in 2019 to more than $1.8 billion in 2021.

As the company grew, so did its workforce, increasing almost six-fold from 700 to 3,800 in that two-year period. "This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal," Tenev wrote. "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."

Related: 3 Things to Know About Robinhood and Zero-Commission Stockbrokers

Despite the sharp decline overall, the company did see its value increase 25% in March after it announced the extension of its equity trading hours, with the potential for 24/7 equities investing moving forward.

Robinhood is expected to report its Q1 2022 financial performance on April 28.

Robinhood Markets Inc was down over 5% today as of 10:38 a.m.

Amanda Breen

Entrepreneur Staff

Features Writer

Amanda Breen is a features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Business News

Red Lobster Changed Its 'Endless Shrimp' Promotion After Losing $11 Million in One Quarter — Now It's Hauling Out Another All-You-Can-Eat Deal

The restaurant chain reported a record $12.5 million operating loss in the fourth quarter of 2023.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Business Solutions

The Ultimate AI ChatGPT and Python Programming Bundle Is $30 This Week Only

Expand your knowledge and bring more work in-house to improve your business.

Marketing

How to Make PR Campaigns Customer-Focused Instead of Company-Focused

The 21st century has seen a shift away from the company that's "selling" and toward the consumer that's "buying." Business practices, like PR campaigns, have had to transition in kind to stay relevant in the current culture and to resonate with the public.

Productivity

SMART Goals May Be Holding You Back — Try This Effective Goal-Setting Technique Instead

Everyone suggests SMART goals, but this framework is flawed. Learn why and how to create goals properly — ones that you can actually achieve.

Business News

2024 Could Be the Year that Makes or Breaks a Lot of Small Businesses, According to a New Report

About a third of small business owners indicated on a Slack survey that they aren't sure if their businesses will survive the year.