(RepublicanNews.org) – The economy continues to lose steam under President Joe Biden, with Robinhood Markets being the latest in a series of companies to announce layoffs. Citing a lack of engagement from its customer base, the business announced on June 26 that it would be cutting 7% of its full-time workforce or about 150 employees.
Robinhood is a popular electronic app for stock trading.
“This may mean teams make changes based on volume, workload,” a portion of the company’s statement read. The most recent employee totals provided by Robinhood show a workforce of 2,300.
The layoffs come just one week after the company announced the acquisition of finance tech firm X1 Inc. in a cash purchase for $95 million. The business is known for producing a novel 17-gram credit card. Forbes says the card is marketed to those “with a solid income but a weak credit score.”
The X1 Inc. purchase will provide Robinhood with a new revenue stream as the traffic on the company’s main stock trading app decreases. The app was introduced to the public in 2015 and its interface quickly became popular for its ease of use amongst consumers.
In 2021, Robinhood’s decision to restrict transactions for a particular stock led to national controversy. The restriction was preceded by an immense short squeeze that had been organized by members of a Reddit community. The group called themselves WallStreetBets and was composed primarily of nonprofessional traders, some of which were children.
Their efforts on the social platform triggered a short squeeze for Gamestop (GME) stock that saw the price ultimately climb more than 1,600%. While many users were able to redeem their profits before Robinhood imposed a trading restriction on GME, many were not. Their inability to capitalize on the organized short squeeze led to much anger.
After the restrictions were imposed, the GME stock retraced to unprofitable levels. Robinhood CEO Vlad Tenev was eventually called before the House Financial Services Committee to testify on the matter.
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