The trading platform Robinhood is going through major changes today as it lays off almost a quarter of its staff. This follows employee cuts of about 9% back in April, putting the company in a dire position as it attempts to downsize to deal with hemorrhaging profits.

The Reason behind the Layoffs

Why is it that Robinhood is laid off so many of its employees? The short answer is that the crypto market is down considerably. Today’s mostly flat market is just a minor indication of how little activity we’re seeing in the crypto market this year compared to last year.

Since the beginning of 2022, most crypto tokens have fallen considerably. For example, Bitcoin (BTC) enjoyed an all-time high record late last year, but this year it’s fallen to about half of where it started. Similarly low numbers can be recorded for most cryptos, showing a falling level of interest in the market.

It hasn’t helped that the economy has been spiraling downward ever since the Russian-Ukraine war. That followed periods of rough economic movement due to the coronavirus pandemic.

All of this has led to trading platforms like Robinhood having a tough time making the kind of profits that they used to. Robinhood’s revenues are down an astounding 44%. The company has to do something in order to survive, and the easiest way to cut costs is to cut employees.

Rapid Growth Now Stagnated

Robin Hood grew exponentially over 2021, as the company expanded with the increased interest in the cryptocurrency market. They were meeting a demand that seemed like it might never end. At this point, though, with profits down and inflation high, investors have been pulling out of the market in droves.

This has left Robinhood with a lot of redundant employees. Those positions that they never seemed to have enough staff to fill are now brimming with extra staff members who have very little to do. It makes sense to let them go so that the company can enjoy a little profit.

No one knows when the crypto market and the global economy will turn around. Inflation is that a record high and rising, and there’s no end in sight to the economic downturn. The crypto market could recover and put Robinhood in a better financial position, but that probably won’t happen anytime soon.