Things continue to get more challenging in the finance industry. For example, Robinhood, the popular discount brokerage firm, will lay off nearly 10% of its workforce. A terrible growth curve and too many people doing the same jobs warrant such a drastic measure.
Robinhood Needs To Size Down
It has been an interesting year for Robinhood, as the company has made numerous headlines. However, the overall growth curve for 2022 and beyond looks less than stellar. CEO Vlad Tenev confirms there needs to be a restructuring, and roughly 9% of all employees will be laid off in the coming months. A somewhat surprising development, although a necessary change for the broker.
The hyper-growth throughout 2020 and the first half of 2021 has been stellar for the company. But, unfortunately, it could not be sustained, forcing Robinhood to rethink its current employee-oriented approach. As the company saw a tremendous increase in new clients throughout the growth period, they also hired 3,000+ employees. Several employees are now fulfilling duplicate roles and job functions, plus they introduce more complexity than necessary.
Robinhood CEO Vlad Tenev adds:
“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.”
Robinhood will carefully evaluate its headcount growth targets in the future. Automation and operational efficiency are the main objectives, as those will serve customers best. Laying off 9% of the staff is an unwelcome decision for a company losing $423 million in its 2021 Q4 results.