Shares of Robinhood Markets (HOOD) fell 2% after the company released its results a day earlier than expected and announced it would cut 23% of its workforce. The job cuts mark the second round of layoffs for the brokerage as the company continues to be criticized for a sharp slowdown in client business activity. Robinhood’s stock price has fallen over 80% in the past year.
Online brokerage had grown in popularity during the pandemic. However, Robinhood CEO Vlad Tenev said after laying off 9% of its workforce in April, the cuts had not gone far enough to help the brokerage cut costs.
Reporting its financial results a day earlier, Robinhood said its monthly active users had dropped to 14 million, down 34% from a year ago. At one point after Robinhood went public, it had 21 million active users.
Second-quarter revenue fell 44% to $318 million, down from analyst estimates of $321 million. In the second quarter of 2021, Robinhood reported revenue of $565 million. Revenue from client trading activity fell 55% in the latest quarter to $202 million.
Robinhood shares are down around 48% so far this year.
“Not only is Robinhood bleeding accounts, but its existing clients are trading less on the platform, particularly in options and cryptocurrencies, the only two asset classes on which Robinhood earns commissions. trading remains muted, Robinhood and other online brokers will remain under pressure,” said Caleb Silver, editor of Investopedia.