The digital currency market has been going through a rough patch now. Various kinds of cryptocurrencies have been experiencing the worst time they ever had in their lifetime. Some have even incurred losses and have fallen to depths from which it might even be difficult for them to return. Robinhood, the online brokerage firm has had to bear the brunt of many losses and even had to let go of almost a quarter of its employees. Various reasons led to it and some of them have been discussed in this article.
Reasons for downsizing at Robinhood
The main two reasons for the downsizing of the online brokerage firm, Robinhood were the disruption of the macro market as well as the crash of the cryptocurrency. These two factors led to the deterioration of the firm and left it with huge losses from which it was difficult for them to recover. As a resolution and to help sustain the firm, it had to. land on a tough decision which is downsizing. This news came recently when the co-founder and CEO decided to share it with the general public.
Further, the firm even published reports that showed the final results of tepid Q2 which were very poor. The firm was also charged with a 30 million dollar fine by the New York State Department of Financial Services for being involved in unethical activities such as any-money laundering. Their crypto branch of the company had to bear the brunt of it all. They were even charged with various other allegations and even disobeyed various rules. Other allegations included charges of breach of cybersecurity, violation of consumer protection protocols, etc. All of this further led the firm to its downfall in a way.
Impact of the layoffs on the firm
Needless to say, the layoffs had a huge impact on the whole firm in many ways. It did not only show the company in bad light or as one that is on the path towards destruction but also affected all of its functions. However, the main sectors that got affected the most were marketing, operations, and program management. The number of employees that had to let go of their jobs was estimated to be around 780 which constituted almost 23% of the whole staff. It was a blow that shroom the very core of the company.
What were the previous records of the company?
In the past, even though Robinhood has had to suffer losses the one it faced recently was the biggest of them all. In the previous year, it had to let go of almost 9% of its staff, however, it did not help the company in a big way or even in every that it needed. The economic conditions of the contemporary world are to be blamed for whatever’s happening with the crypto market and with it with the firms.
Conclusion
There were some misconceptions made by the firm at the beginning of the year, which resulted in miscalculation and misinterpretation of data that led to the downfall of the firm. In the beginning, more users were getting involved with the platform as a result of the Covid 19 pandemic, however, this trend did not last for a long time.
The recent results that were then published by the company showed data that were quite disheartening to see. It showed a downfall or decline in every aspect of the firm. However, that particular firm witnessed a rise in its value and its share price after it was noticed by the FTX founder who invested a sum of 650 million dollars for a share of a 7.6% stake in the firm.
