Robinhood's CEO and co-founder Vlad Tenev said the company would reduce its staff by roughly 23% as part of a larger company reorganization into a General Manager structure.
Tenev said that while all branches of the business will be affected, the main areas will be operations, marketing, and program management. The move comes just a few months after Robinhood laid off about 9% of its staff in April.
Tenev said the current economic turmoil and increasing inflation played a significant role in the decision, as does the declining price of digital assets. Coinbase and OpenSea have also had to reduce staff.
Robinhood's second-quarter financial reports were mixed. Revenue fell by 44% year-over-year to $318 million, resulting in a net loss of $295 million.
Robinhood's troubles don't stop there: the company's cryptocurrency unit has been fined $30 million by New York's highest financial regulator for alleged anti-money laundering and cybersecurity violations.
The Wall Street Journal reports that the New York State Department of Financial Services discovered substantial deficiencies in Robinhood's bank secrecy law and anti-money-laundering compliance programs as a result of the company's growing size.
Robinhood's cybersecurity program failed to adequately address its operational threats, and its policies were inconsistent with the regulator's cybersecurity and virtual currency requirements. There was also no dedicated phone number on the company's website to respond to consumer complaints.
Robinhood must retain an independent consultant to evaluate its actions in response to the regulator's concerns.
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