Robinhood Markets Inc (NASDAQ:HOOD) has announced the termination of about 9% of its full-time employees, sending its shares down 5% in extended trading.
The retail trading platform is due to report its quarterly results later this week.
When Robinhood reported its 2021 fourth-quarter earnings in January, it predicted total net revenues would decrease compared to the 2021 first quarter.
Vlad Tenev, chief executive cited a period of significant headcount growth that created "some duplicate roles and job functions, and more layers and complexity than are optimal."
As of December 31, the company had 3,800 employees.
"After carefully considering all these factors, we determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers," he wrote in a blog post to employees.
Tenev said "global conflict, economic uncertainty, and high inflation" force it to respond to changes. "We are also scrutinising our headcount growth targets."
Due to its easy-to-use interface, Robinhood became a hit with young investors trading cryptocurrency and stocks from home during the COVID-19 outbreak.
Tenev said in his blog post that Robinhood still plans to "accelerate our product momentum through 2022 and will introduce key new products across brokerage, crypto, and spending/saving."
The stock was down 3.75% on Nasdaq at US$10.00.
Robinhood announced its acquisition of crypto startup Ziglu earlier this month and discussed plans to support Lightning network payments and wallet services at the Bitcoin 2022 event in Miami.
Christine Brown, Robinhood's chief operating officer for crypto, left the brokerage app company late March.