Après un succès foudroyant, la plateforme de courtage en ligne Robinhood voit le nombre de ses clients chuter avec la baisse de la Bourse et des cryptos.

in decline, Robinhood is once again cutting into its workforce



The American online brokerage platform Robinhood, which revolutionized the market with its free model for individuals, will once again cut its workforce, against a backdrop of growing American disinterest in the stock market, but especially in cryptocurrencies, including prices have fallen sharply in recent months.

The redundancy plan concerns 750 positions, or nearly a quarter of the workforce. “Last year, we recruited on the assumption that the appetite for the stock market and cryptos observed in the Covid era would continue in 2022”justified the co-founder of the platform, Vlad Tenev in a letter to employees published on the company’s blog.

28% drop in users

The Californian company had already cut around 9% of its workforce at the end of April, after seeing the number of active users drop by 8% between the third and fourth quarters of 2021. It also indicated that it would focus on cost control.

But this first purge was obviously not enough. “Since then, we have seen the macroeconomic environment deteriorate even further, with inflation at a 40 year high, accompanied by a crash in the crypto market. This has further reduced our customer activity and assets. under our control”explains the boss of Robinhood.

According to the quarterly earnings release on Tuesday, Robinhood had around 15 million monthly active users at the end of June, down 28% from a year ago. Its turnover plunged by 44% over one year. Faced with the cryptocurrency crisis, several investment platforms specializing in these volatile currencies have recently declared bankruptcy. And, more generally, many technology companies have slowed the pace of hiring or fired staff, faced with the unfavorable economic context.

Turbulent history

Although short, the history of Robinhood has already been marked by several controversies. The platform, whose mission was to “democratizing finance”, was at the heart of the controversy linked to the mad speculation around meme stocks, such as Gamestop, on Wall Street in January 2021. Its business model is also in the sights of supervisors: to ensure free orders for its clients, Robinhood “sells” to intermediaries, “market makers”, such as the broker Citadel, its order volumes. This practice of “payment for order flow” is legal in the United States (this is not the case in France) but it is considered opaque and potentially a source of conflicts of interest.

Last Monday, the New York Stock Exchange constable fined Robinhood $30 million for violating money laundering and cybersecurity laws over its cryptocurrency business.

Since its IPO in July 2021, the company has lost almost 80% of its capitalization.

(with AFP)