'Robinhoodies' knew about pending layoffs weeks before the company decided to cull more staff
Hi. Aaron Weinman here. Robinhood cut about 23% of its staff earlier this week, following a first round of cuts in April. The pandemic darling has come back down to Earth, and today we learn that some of the axed 'Robinhoodies' knew what was coming.
More on that below — and you can listen to my rundown on the story in this morning's episode of The Refresh on Insider.
And of course, there's our Banker of the Week!
1. 'Robinhoodies' were tipped off to layoffs weeks ago. The company said it was shrinking office space and some managers warned of an impending "reorganization," Insider has learned.
The trading app laid off 23% of its staff on Tuesday, following a first round of cuts in April.
And the morale is grim. Former employees described a company laser focused on cutting costs, and a workforce with little clarity on their future with Robinhood.
"The company is hemorrhaging money," one ex-employee told Insider. "I believe in the mission itself, but people cannot trust us ever since GameStop."
Robinhood effectively brought stock-trading to everyone from your local barista to Wall Street's most trusted money managers. When we were cooped up at home in the early stages of the pandemic, Robinhood became a go-to app for folks with extra time and stimulus checks.
Now, a year after going public, Robinhood Chief Executive Vlad Tenev admitted the company added too much staff too quickly. His mea culpa also included an admission that Robinhood was not prepared for weaknesses in the economy.
Insider's Bianca Chan, Carter Johnson, and Asia Martin spoke with laid-off "Robinhoodies" about how they saw the writing on the wall.
And ICYMI - check out these stories the team at Insider have done on Robinhood's recent woes:
- Robinhood employees' internal messages to each other at the height of the GameStop trading frenzy.
- Robinhood has big crypto ambitions, but employees claim product delays, a cautious legal team, and turnover in leadership.
- Robinhood's founders were 'visibly shaken' in announcing layoffs, but there was not enough work and too many people.
- Talk of a Robinhood acquisition elicits visceral reactions from analysts and investors.
- GENERATION ROBINHOOD: How the trading app conditioned its inexperienced users to obsessively play the market.
In other news:
2. Inflation, rising rates, and the "crypto winter" are creating financial strain. That is an opportunity for bankruptcy experts. Meet 16 lawyers whose bankruptcy battles, from Revlon to JCPenney, have them set for a boom in business.
3. Ken Griffin's Citadel has trounced rivals from Millennium to ExodusPoint this year. It added to its lead in July as stock markets improved.
4. Staying on Griffin, the Citadel founder was put on a list of individuals subpoenaed by Twitter in its legal battle with Elon Musk. The notice for Griffin was filed as part of a slew of documents from Twitter and Musk, who is trying to get out of buying the social-media company.
5. Credit Suisse weighs cutting thousands of jobs, according to Bloomberg. The Swiss bank is expected to finalize the plans over the coming months.
6. Wall Street firms are going beyond traditional talent pools to hire climate scientists. Firms know that having better insights is invaluable, and they are willing to pay up to get it.
7. CVS Health is gearing up to buy a primary-care company this year. Here are seven companies the $132 billion retailer might acquire.
8. BlackRock has teamed with Coinbase in a crypto market expansion. The partnership will help clients oversee their Bitcoin exposure, according to this report from Bloomberg.
9. Welcome to the Great Salary Convergence — it is a seismic shift in how you're getting paid. Folks working in Dallas would rarely make the kind of cash as people in New York would, but remote workers have fled the coastal cities and kept their bigger paychecks.
10. And here's our Friday Banker of the Week. Meet Jenny Lee, a managing director who just left JPMorgan's leveraged-finance desk to further build investment firm Brigade Capital Management's private-credit business.
After nearly three decades at the Wall Street powerhouse, Lee is taking a leap of faith on the private-debt space, which has taken more market share from traditional banks' capital-markets businesses.
Check out the full story here.
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