Online trading brokerage Robinhood (HOOD) is cutting headcount by 780 workers, or about 23% its employees, in order to further streamline costs amid a continuing decline in monthly active users on the platform.
"This is on me," wrote CEO Vlad Tenev in a letter to company employees. He said the company last year staffed in anticipation of continuing strong retail engagement in both the stock and crypto markets. With crashes in both markets, those assumptions proved wrong.
This is the second round of layoffs for the company this year. It earlier trimmed 9% of its workforce.
Among other changes at the brokerage, Chief Product Officer Aparna Chennapragada stepped down as of today, although will remain in an advisory role to the CEO through Jan. 2, according to a filing.
Second quarter results included transaction-based revenue falling 7% sequentially to $202 million, with a 19% decline in equities revenue and an 11% drop for options. Crypto was a modest bright spot, with revenue up 7% sequentially to $58 million.
Monthly average users (MAU) suffered another sizable drop, to 14 million from 15.9 million in the first quarter. MAUs peaked in the second quarter of 2021 at 21.3 million.
Adjusted EBITDA was a loss of $80 million in the second quarter, improving from a loss of $143 million a quarter earlier. "We continue to challenge ourselves to reach a positive run-rate for Adjusted EBITDA by the end of 2022," said the company.
The company expects to occur about $30 million-$40 million in cash restructuring and related charges from employee severance and benefits costs.
Robinhood said it still seeks to introduce its non-custodial crypto wallet later this year.
HOOD shares are down about 3% in postmarket trading. The company earnings call is set for Wednesday afternoon after the close of trading.
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