Robinhood layoffs hit 82 Charlotte workers

CHARLOTTE – Robinhood is cutting jobs and conducting layoffs, again. A few months after the company cut 9% of its workforce, the company announced on Tuesday that it plans to lay off an additional 23% of workers.

And that includes 82 employees who are based in the Charlotte office, according to a report from the North Carolina Department of Commerce.

But it’s not just job cuts coming to the company’s footprint in the region.

A required legal notice sent by the company to the state’s Department of Commerce and later obtained by WRAL TechWire states that the financial services company will close “the entire facility.”

A big expansion deal with the state, signed in March 2021, appears unlikely to be completed, given the company’s letter to the state.

That deal saw the company commit to invest more than $11 million in the region and hire nearly 400 workers by 2025 who would earn about $76,000 in average wages. But it now appears that this promise from the company will go unfulfilled.

What’s happening: The company is making the latest round of layoffs in a move that CEO Vlad Tenev described in a blog post published on Tuesday as “a broader company reorganization.”

All company departments and functions will be impacted, according to Tenev’s letter, though he noted they would be “concentrated in our operations, marketing, and program management functions.”

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Robinhood’s rationale

The company’s move to cut 9% of its workforce “did not go far enough,” said Tenev. That round of layoffs, announced earlier this year, was intended to coincide with a renewed corporate focus on “greater cost discipline,” Tenev said in Tuesday’s blog post.

It’s not just internal, Tenev wrote. Since those layoffs were announced “we have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash,” he said.

But the company made staffing decisions 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.”

The company pledged to create at least 400 net new jobs in Charlotte in March 2021, signing a deal with North Carolina’s Economic Investment Committee under which the company could have received about $4 million in economic incentives over a 12-year period.

But the expected heightened engagement in retail trading on the company’s platforms did not materialize, despite the company’s hopes.

Cryptocurrencies have plunged in value, and may soon face an onslaught of regulation. And the stock market took a dive into bear market territory earlier this year, as well.

Further, Robinhood got bad news from regulators, including receiving a $30 million fine from the State of New York on Tuesday for allegedly violating reporting requirements.

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Layoffs in Charlotte continue

The layoffs at Robinhood, which will be conducted between August 3 and October 1, according to the report from the North Carolina Department of Commerce, are just the latest layoffs to hit the Charlotte area.

Last week, a cargo services firm announced it would lay off 154 employees from two company divisions.

And Arrival, an electric vehicle manufacturer who operates the company’s North American headquarters in Charlotte, could announce layoffs of up to 30% of its global workforce, including Charlotte, as early as next Thursday during the company’s quarterly earnings call, WRAL TechWire previously reported.

Other financial services firms with a presence in Charlotte have announced layoffs, as well, with layoffs sweeping the mortgage industry as lending activity has slowed following the increasing costs associated with borrowing money.

That includes layoffs at RealGenius, a division of First Bank, which announced 74 layoffs earlier this year, Wyndham Capital Mortgage which announced it would lay off 44 workers by August 1, and Interfirst Mortgage Company, which announced 77 layoffs in November of 2021.