Companies | Robinhood, which became known as a broker of meme stocks, is laying off almost a quarter of its employees

An investment application company Robinhood Markets plans to cut about 23 percent of its full-time workforce.

During the corona pandemic, many new private investors rushed to the stock market and the popularity of Robinhood’s application exploded.

Robinhood was especially known as a brokerage platform for so-called meme stocks. Meme stocks are stocks selected as buying papers in Reddit’s investment discussions, such as AMC and Gamestop.

This year, the stock market has been falling, the pace of trading has slowed and Robinhood’s growth has stopped. In its earnings announcement, Robinhood said that the company’s turnover in April–June fell by 44 percent year-on-year to $318 million and net losses rose to $295 million. At the same time, the number of active monthly users of the application decreased by 34 percent to 14 million.

Robinhood lays off many employees for the second time this year. In April, the company announced that it would reduce its staff by nine percent. In total, the reductions now apply to more than a thousand jobs. Among other things, they reported on the matter The Wall Street Journal and Reuters news agency.

CEO of Robinhood Vlad Tenev according to the layoffs are part of a larger reorganization. Tenev says in his statement published on the company’s website that the spring layoffs were not enough to cut costs enough.

“Last year, we sized our workforce in several functions with the assumption that the increased trading of private investors in stocks and the crypto market seen during the corona period would continue in 2022,” says Tenev.

Tenev states that he is responsible for the ambitious recruitment pace and, with it, also for the layoffs.

In addition to Robinhood, many other technology companies have announced that they will reduce their workforce as growth slows down and the economy moves into recession. For example, Twitter, Netflix and Tesla have announced layoffs.