Robinhood lays off 9% of its employee base as stock prices crash, hitting an all-time low. The company’s CEO said that they are affirmative that cutting down on staff will improve the efficiency. Still, this is a pretty significant number and might indicate that the company is struggling financially. It’s also important to note that Robinhood hasn’t still recovered from the effects of lowering Dogecoin trading.
Robinhood is struggling
The company went public back in mid-2021 and has lost most of its value since then. Robinhood’s all-time high is nearly $70, and it is now trading at around $10. In the past month, it has corrected by around 40% and has hit a new all-time low since the IPO. Such poor performance can be attributed to the fact that exchange stocks often follow the crypto market pattern. However, if we compare it to Coinbase, the latter has fared much better in this bear market.
If the markets recover and the company’s new products take off, we can expect it to make a solid recovery. In this industry, it will take just a few months to change things around, so we cannot say this is the end for Robinhood.
Laying off employees
A company laying off employees is different than firing them. Layoffs happen when a business finds that some job roles become irrelevant or aren’t required anymore. Employees might be called back if there is something suitable for them. The company’s CEO said that they have seen a phase of rapid growth in 2021 and that has increased its employee count nearly 6 times. But lately, a lot of the job roles of these employees have become obsolete and hence the layoffs.
The CEO further added that there had been a lot of duplicate roles, job functions, and complexity. And this has made things very inefficient. So, with fewer employees, the company can function better and also save a ton of money from salaries, office space, and other incentives. Robinhood will still continue to hire new employees for key roles that open up in the future.
What are your thoughts as Robinhood lays off 9% of its employee base? And do you think the culture of hiring a lot of people during hypergrowth periods and laying them off soon after is a justifiable practice? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
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