Robinhood lays off 23% of its staff as the company fails to meet revenue expectations in Q2 2022. A blog post from Robinhood states that they are transforming the company into a General Manager (GM) Structure. It also added that the layoffs are primarily focused on marketing, program management, and operations. This is the 2nd time that the exchange is laying off employees after the first 9% layoff back in April 2022.
Why is Robinhood laying off nearly 1/4th of its workforce?
In the blog post by the company, the CEO and co-founder first shared how sorry they are for taking this step. However, it is something they had to do for the company. The blog then mentioned how they expected the 9% layoff to do the job, but it didn’t do enough. With his high inflation and crypto market crash, Robinhood had no other option but to lay off more employees. In fact, they are quite affected as the trading volume goes down.
The company planned its operation in a way that they would see very high engagement from retail investors and high market activity. So, their hiring was also based on that. But the current economic conditions globally and the crypto crash have changed things. To be able to make it through this bear market, they have to make harder decisions. In fact, the CEO of Robinhood says that he takes full responsibility for this, and it is on him.
Robinhood is also ensuring that the layoffs happen as smoothly as possible. They are going to offer employees all the regular pay and benefits for the month of August. Plus, they will also be eligible for other benefits like cash severance, insurance premiums, and job search help. It is a good gesture from the company.
So, what does it mean for the business?
As Robinhood is moving toward a General Manager structure, they are expecting to reduce roles and positions that are not required, cut down on dependency between multiple stakeholders, and make teams more efficient. In this structure, the GM will also be responsible for the business.
What are your thoughts as Robinhood lays off 23% of its staff to shift to a GM structure? And do you think it will help them get back on track? Let us know in the comments below. And, if you found our content informative, do like and share with your friends.
Also Read: Michael Saylor steps down as Microstrategy’s CEO due to losses.
