Retail brokerage firm Robinhood is cutting back staffing levels, citing “duplicate roles and job functions” after rapid expansion last year.
CEO Vlad Tenev made the announcement in a blog post on Tuesday afternoon. Shares fell more than 5% in extended trading.
The move will affect about 9% of full-time employees. Robinhood reported 3,800 full-time employees as of Dec. 31. The company declined to give more detail on the exact number of employees being let go.
“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,” Tenev wrote.
“While the decision to undertake this action wasn’t easy, it is a deliberate step to ensure we are able to continue delivering on our strategic goals and furthering our mission to democratize finance,” he added.
Robinhood is scheduled to release its first-quarter results after the bell on Thursday. The blog post didn’t mention those financial results other than saying that the company has more than $6 billion in cash on its balance sheet.
The company previously reported having $6.25 billion in cash and cash equivalents on its balance sheet at the end of December.
Going forward, the company will review employee growth plans and “continue to prioritize internal opportunities for automation and operational efficiency,” Tenev wrote.
Robinhood rose to prominence in early 2021 as a key player in the GameStop saga, where retail investors bid up so-called meme stocks.
The brokerage saw a surge of new customers and cash, and entered the public markets through an IPO in July. However, the stock gained little traction and has traded below its IPO price of $38 per share for much of its existence. Shares closed at $10 on Tuesday.
The company shed monthly active users during the fourth quarter, and its first-quarter results will face tough comparisons to the GameStop mania of the first quarter of 2021.