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Robinhood lays off 23% of staff

wsj.com

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Re: Robinhood lays off 23% of staff

#131

Post by adam_arthur »

paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

Brokerage is such a competitive space, their valuation never made any sense. And big money players would never use Robinhood over Schwab et all

Re: Robinhood lays off 23% of staff

#133

Post by gruez »

daoist_shaman wrote: post #124

This is a red flag. Robinhood is struggling for capital, so I wouldn't trust them with my cash investments whatsoever. Not that anyone has trusted them for a while, but yeah.

>Robinhood is struggling for capital, so I wouldn't trust them with my cash whatsoever.

Why not? You're protected by SIPC for up to $500k (for securities) and $250k (for cash).

Re: Robinhood lays off 23% of staff

#134

Post by xyst »

daoist_shaman wrote: post #124

This is a red flag. Robinhood is struggling for capital, so I wouldn't trust them with my cash investments whatsoever. Not that anyone has trusted them for a while, but yeah.

agreed - had $50K in investments (I admit, it’s small fish). Transferred that to another brokerage following the GME sell button fiasco. Although in retrospect, I probably should have switched sooner than that

Re: Robinhood lays off 23% of staff

#135

Post by guntars »

a-dub wrote: post #59
V__ wrote: post #42

Earlier quoted context omitted.

If you crash a company against the wall resulting in such a disaster and having to cut so much staff, resigning isn't enough. CEO's should have to pay back big parts of their compensation.

executives should be compensated for the performance of the company in the future, not the current quarter or year. this is the board's fault for failing to set effective incentives.

Exactly, there should be a multi-year lockout period where the CEOs cannot sell their stock. If the potential hires don't like it, well, cry me a river. Plenty of people would still take the job, especially if they are interested in building a long-term company.

Re: Robinhood lays off 23% of staff

#136

Post by tootie »

fleddr wrote: post #85

We live in such morally bankrupt times. You can just say "you take responsibility" without actually taking responsibility at all. Our expectations have become so low and we've become so complacent that just the statement is enough. In similar vain, "we care about your mental health" as is the common internal email from HR. No actual care is offered though. Giving staff a day off is a tangible example of doing at leas…

I only object to the notion that this is a problem of these times. It's human nature and always has been.

Re: Robinhood lays off 23% of staff

#137

Post by jmyeet »

paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

> ... took an irreversible reputation hit among its core user base because of the GME fiasco

God I'm so sick of hearing this. It comes from people who seriously don't know what happened.

let me explain: RH had (and still has) a service that you can trade immediately on signing up and sending funds rather than waiting for them to clear. This mostly works out fine because people buy different things and you have the underlying assets as security so it tends to work out, meaning it's not a risk of a huge loss. Put another way: the convenience of RH lending you money (because that's actually what's happening) is counterbalanced by the additional business they get.

When GME popped off, they got a ton of sign ups to buy GME. This wasn't people using their own money to buy GME. This was RH lending you money to buy GME. And suddenly it didn't balance out. RH actually had a huge long GME position effectively. They actually borrowed a billion dollars to cover that and that was insufficient. So they stopped lending money to buy GME to avoid insolvency.

Remember too that they are lending you money on the promise you would fund the account. If people bought GME at $100 and it dropped to $30, RH would be left holding the bag as a significant percentage of people would simply avoid the loss by not funding their accounts. RH may have recourse to pursue that in court but that's going to get expensive and is a losing option all around.

That's literally all it was.

Some people were so delusional about what was going to happen with GME. They thought that since the open short interest exceeded the stock actively traded, the shares were going to go to infinity or something like that. That was never going to happen.

Re: Robinhood lays off 23% of staff

#138

Post by xyst »

gruez wrote: post #133
daoist_shaman wrote: post #124

This is a red flag. Robinhood is struggling for capital, so I wouldn't trust them with my cash investments whatsoever. Not that anyone has trusted them for a while, but yeah.

>Robinhood is struggling for capital, so I wouldn't trust them with my cash whatsoever. Why not? You're protected by SIPC for up to $500k (for securities) and $250k (for cash).

Aren’t they selling the order flow of retail traders? Protected or not. I’m not trusting them.

“Robinhood” my ass

Re: Robinhood lays off 23% of staff

#139

Post by rootusrootus »

That's brutal. We just laid off a couple hundred people last week, only five from our department (which is 190 people) but two of them were from one of my teams. Demoralizing, and in the case of that team, absolutely devastating to productivity in the short term.

Cutting almost 1 in 4 employees is beyond anything I can imagine. I think I'd feel like I was rearranging deck chairs if I survived the cut and stuck around. I'd be putting out my resume right now.

Re: Robinhood lays off 23% of staff

#140

Post by systemvoltage »

munk-a wrote: post #71
systemvoltage wrote: post #55

Earlier quoted context omitted.

Wait, shouldn't this be returned back to whom the money belonged (investors)?

Investment comes with risk - that's why you can make money at it. I think it's fair to say if this business is struggling it'd be more equitable to share the excess compensation with rank and file employees that are being deprived of their livelihood but unfortunately they likely have no "right" to that compensation with how various employee contracts are structured. It's usually the case in situations like this that…

All these people had salaries in excess of $180k I presume + stock compensation. Sorry, but they do not fall in the category of people that were exploited.

I firmly believe in at will employment.

In this case, the CEO exploited the investors, whether it is VC firms, institutional or private investors by making an error in the judgement of hiring needs. Of course there is a risk in investment, but when CEO's make major mistakes while paying themselves $800M in compensation; investors should seek relief.

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