Even Though Robinhood Laid off 9% of Their Staff it Might Just be What They Need to go Crypto

By Cje95 | Chronic Illness and Crypto | 3 May 2022


Last week news broke that Robinhood was cutting back the size of their staff and it was not just a small cut either rather it was 9% of the company's entire staff. A cut of that size was not expected and raised some alarms about how the company was doing financially. Was Robinhood okay or was it really suffering? While it might sound terrible it is important to note one very very important thing. Two weeks ago Robinhood made an acquisition that could pay enormous dividends for the company. It bought the UK licensed crypto exchange Ziglu giving Robinhood access to the UK markets without having to hassle with licensing themselves as though bought a product where it was all already done. 

 

This acquisition cannot be understated. Earlier this year Robinhood announced that it was going to be crypto first going forward. At the time it did not make to much sense as they had not added any additional cryptos and really did not function in any other country besides the United States. With this acquisition though Robinhood gained a foothold in the UK and stands to be able to use this acquisition as a springboard into the rest of the European market. 

 

Regulations are one of the hardest things for these centralized exchanges to navigate and instead of fighting through all of the bureaucratic red tape, Robinhood decided to just scoop up someone who had done all of the grunt work. This also gives the customers that use Ziglu the liquidity and strength that Robinhood has to offer. Robinhood has immense reserves at its disposal something that I highly doubt that Ziglu itself had. With access to these reserves if something catastrophic occurs Robinhood would be much more adept at handling the issue than Ziglu would by itself. 

 

As for the 9% staff reduction and should, that be concerning? The answer is yes and no. If Robinhood continues to have mass layoffs then yes this initial one was the signal that things were not great. However, when you take a step back and look at how quickly Robinhood grew in the last couple of years slowing growth was bound to happen. With this slowing growth different positions were going to be overstaffed and so cuts were going to have to be made. Rather than try and hope that the user growth would pick back up the executives at Robinhood cut their losses where they were and moved forward. 

 

By far though the biggest thing that stuck out to me though when you look at these two stories together is as Robinhood makes good on its idea/goal of being an international crypto first platform how much staff do they really need? Looking at crypto companies and organizations and comparing them to traditional companies is like looking at night and day. While traditional companies would have tens of thousands of workers these new companies we are seeing emerge in the crypto space are much much different. Their employee numbers tend to be a lot lower and not only that they are also much more streamlined than traditional companies. 

 

Without the need for the depth and layers that traditional companies offer it is not surprising to see layoffs occur. As new systems are implemented to automate certain things the workers that performed those jobs are not needed. When an employee is displaced typically a company will try to find a new role for them in-house but with Robinhood pushing forward with crypto, there is just much less of a need. Not to mention for these projects they are working on a unique set of skills is required and it is much easier to just hire someone else off the street than it is to spend months training these individuals and hoping that they are thorough in their code. 

 

It will be interesting to see over the summer how Robinhood further develops its crypto offerings. Will they focus on adding more coins or will they focus on international crypto growth? There are a ton of possibilities and I look forward to seeing how it all develops. Robinhood has really done an amazing job rolling out its wallets and even got them out to people ahead of schedule! With the market being so turbulent right now I could see Robinhood playing the wait-and-see game with regards to altcoins since they can go bust really quickly. If you have not joined Robinhood yet and would like to use my referral link here and when you connect your bank account we both receive a free share of stock just for signing and setting up your account! 

 

Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

 

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Cje95
Cje95

Graduated from Texas A&M in May of 2020 had dabbled in crypto since 2017 but dove in at the end of 2019. December of 2020 packed up and moved to D.C.! Huge sports fan, space nerd, and international newsreader! Follow me on Twitter @Cje95_


Chronic Illness and Crypto
Chronic Illness and Crypto

Cryptocurrency and Blockchain are going to be a huge part of the future and no matter who tries it isn't going to be stopped! Here I try to give my best insight and thoughts into the latest crypto news, features, developments. Further, I look to discover any link to news from the United States ranging from social-political issues to stock market and economic data.

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