Robinhood’s monthly active users plunged 34% to 14 million over the past year. Retail investors are leaving the platform as stocks and cryptocurrencies plummet. The trading app now plans to cut 23% of its staff, chief executive Vlad Tenev said. Loading Something is loading.
Robinhood has lost a third of its users in the space of a year as retail investors quit the trading app with stocks and cryptocurrencies struggling to deliver returns.
The trading app saw its number of monthly active users slide 34%, by roughly 7 million, to 14 million over the past year, according to a second-quarter earnings report released Tuesday.
Retail investors have struggled during a punishing 2022, with recessionary fears and rising interest rates hitting their portfolios.
Both stocks and crypto have suffered broad and deep sell-offs, with the S&P 500 slipping just under 15% year-to-date and bitcoin crashing by over 50% to just over $23,000.
“We have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash,” Robinhood chief executive Vlad Tenev said in a blog post Tuesday. “This has further reduced customer trading activity and assets under custody.”
Robinhood’s shrinking user base appears to have made downsizing necessary, with Tenev announcing a fresh round of job cuts.
“We are reducing our headcount by approximately 23%,” he said. “While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions.”
Robinhood surged in popularity during the coronavirus pandemic as lockdowns drove a boom in first-time retail investing. Tenev conceded that the company over-hired during that period.
“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022,” he said. “As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.”
Robinhood’s stock slipped 0.54% in early-morning trading Wednesday to trade at $9.18.
Read more: Tech’s great layoffs: Over 30,000 tech employees lost their jobs as of July. These are their stories in their own words.
Deal icon An icon in the shape of a lightning bolt. Keep reading
More: MI Exclusive Markets Robinhood stock Robinhood stock price Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.