Robinhood is cutting another 23% of its staff after a bad bet on trading growth

Robinhood said Tuesday that it was cutting more jobs as CEO Vlad Tenev acknowledged that the company got 2022 market trends wrong.

Just three months after announcing that it was reducing its workforce by 9%, the trading app said it would cut another 23%. The earlier reductions “did not go far enough,” Tenev said in a letter to employees.

“We have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash,” Tenev said.

He said his team essentially overshot staffing needs for 2022 based on the “assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022.”

But as market conditions deteriorated, Robinhood ended up “with more staffing than appropriate."

“As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me,” Tenev said.

The job cuts will be “particularly concentrated in our operations, marketing, and program management functions,” Tenev said. He also said Robinhood is shifting to a new organizational structure in which general managers “will assume broad responsibility” for individual businesses.

Robinhood is not the only company to admit it overshot on trading. Coinbase rapidly backpedaled from an aggressive hiring plan to cut 18% of its staff in June. And Shopify cut 10% of its staff in July after admitting it guessed wrong on ecommerce growth.

Robinhood shares fell more than 2% in late trading, after gaining 2% Tuesday. The company was scheduled to report quarterly earnings Wednesday but released its second-quarter results Tuesday instead.