Shares of Robinhood Markets (HOOD) tumbled 2% after the company released earnings 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 get slammed from a sharp slowdown in customer trading activity. Robinhood’s stock price is down over 80% in the past year.
The online brokerage had surged in popularity during the pandemic. However, Robinhood CEO Vlad Tenev said that after laying off 9% of its workforce in April, the cuts didn’t go far enough in helping the broker cut costs.
In releasing its financial results a day early, Robinhood said its monthly active users tumbled to 14 million, down 34% from a year ago. At one point after Robinhood went public it boasted 21 million active users.
Revenue in the second quarter fell 44% to $318 million, down from analyst estimates of $321 million. In the second quarter of 2021, Robinhood reported revenues of $565 million. Revenues tied to customer trading activity tumbled 55% in the latest quarter to $202 million.
Robinhood shares are down about 48% so far this year.
“Not only is Robinhood bleeding accounts, its existing customers are trading less on the platform, especially in options and cryptocurrencies—the only two asset classes that Robinhood earns commissions from. If trading activity remains muted, Robinhood and other online brokers will remain under pressure,” stated Caleb Silver, Editor-in-Chief of Investopedia.