Robinhood lays off 23% of staff | Hacker News Reader

Robinhood lays off 23% of staff

wsj.com

672 pointstempsy684 comments

The truth is that a majority of tech companies don't need 50%+ of their employees.

Google could lay off vast swathes tomorrow and be immensely more profitable without any loss in revenue.

The 2010s will be remembered as the golden era for tech employment. The second we start getting industry wide layoffs, the insanely high wage inflation we've seen will kick into reverse much faster than you probably believe possible.

Further, tech employees will be the first to suffer in a high inflation environment due to rising discount rate. Yet tech is such a small portion of the labor force that layoffs here basically mean zilch when it comes to the unemployment rate/inflation, and thus there's a long way for it to fall before the Fed adjusts policy

> The truth is that a majority of tech companies don't need 50%+ of their employees.

Totally agree. The problem is, nobody knows how to tell which ones.

On the ground it's obvious. I'm sure everyone here knows who on their team is crucial to their current production stack, and also knows others who would have no impact (or even positive impact!) if they left.

One level up - the direct EM - has most of that context too, but some is already lost. At the next level (Sr. EM or Director usually), almost all of it is gone. At that point, cutting 50% is just guessing. Keep going up and eventually the risk becomes too high that you'll sacrifice your key players along with the rest. Bath water, baby.

No heuristic is perfect, but it's fairly easy to quantify empirically from activity/records. Developers who are productive (actually write and ship large amounts of quality code) tend to be valuable and those that don't, aren't.

That being said there are some intangibles, like morale etc. It's possible there are people that benefit the team while having low personal productivity.

But anyway, no need to approach in that way. There are probably entire branches of google that could be laid off without any material impact to revenues/profitability, thus all layoffs concentrated in single arm.

Crypto divisions could be cut at many companies without affecting their core businesses. Did Square need to rename itself to Block and add all kinds of crypto functions? How many hundreds of developers are working on that.

I don't think X% headcount cuts horizontally across the org are ever a good idea. Cut non-essential functions. And cut in core branches opportunistically based on low performance.

> The problem is, nobody knows how to tell which ones.

I guess there is no leetcode BS for firing. May be someone create one so that circle of sucks can be completed.

You say that, but companies that cut tech too deep will probably get crushed under a mountain of technical debt or gradually lose goodwill due to buggy or stale products.

Point is, it's possible to ship crap with a small crew. But the cuts won't come uniformly from scoping back or removing low productivity engineers. You'll also see corners cut, upgrades delayed, security flaws ignored, and so on.

Obviously there's bias involved, but I really don't see a reality where this isn't the case. I've literally never worked at a company where half the team could be laid off and the product would still function at its current level of functionality for 12 months; let alone adding functionality. If you've worked at a company like this; I imagine there are some; then sure; the lights could be kept on. Hey there Oracle & IBM 2.0.

Then again, you (the company) just laid off hundreds of extremely talented engineers with few other marketable skills except "the industry you trained them in", you've been paying them insane salaries, they're just going to turn around and compete with you, except now they've got a clean slate and have learned from all the mistakes that caused them to be necessary in the first place.

The well paying, large companies are literally 7 of the 10 largest companies on the S&P. Oh, and by the way, one of those other 3, UHG, they have... 850 job openings with the word "software engineer" in the title; about 15% of all their openings. Johnson & Johnson, they're on there, 300 software engineering openings, out of 3000 total. Berkshire is also on the list, harder to get their count, but you get the point; software is EVERYWHERE.

I just... don't get it. I don't get how someone can believe what the grandparent believes. I mean, you can argue a more measured stance, that the outlier 99.9th percentile salaries we've seen in the past four years are probably going to stagnate. Maybe; I'm not convinced of this, but its a reasonable stance. You can argue it'll be harder to get into the industry, as companies want experience and not coding bootcamps; I'd bet on it. But to argue that tech companies don't need 50% of their employees, when they're the plurality of the wealth of the United States' public markets; its comical. Where else did that wealth come from, if not their (tech) employees? If the argument is they're overvalued, maybe, but that's speculation; buy Puts if you believe it, but I'd buy Calls on "you won't".

Then again, maybe the grandparent is talking about non-tech roles in tech companies? I can't tell; and moreover, I don't think even they know what they're arguing for.

Adding people fast is very bad for an organization's efficiency, for a variety of reasons, including the one you mention.

However, subtracting a lot of people fast is just as bad for an organization's efficiency, for a whole host of other reasons. Not that I expect Robinhood had much choice in the matter at this point.

Covid and the wide scale embracing of remote work is really going to combine with layoffs to massacre our wages.

Some FAANG companies will likely prioritize hiring in Europe and Asia and use that to pressure bay area salaries down.

That remote work stuff will go away. People are kidding if they think large organizations can innovate and remain competitive when everybody on a team isn’t in the same room.

Individually people might think they are more productive (at least coders do) but the communication issues that arise from remote work are gonna really become an issue soon enough.

Well then - found a company that employs half the people and become the next Google. Should be easy if your magic insights can make you twice as profitable. Maybe this is not how innovation works though.

Google could fire their entire org outside of ads, search, and android and still roughly maintain the same revenue/growth.

It's quite obvious. They are dominant via first mover advantage and monopoly esque positioning in search.

And they could likely even not change search at all and stay on top for 10+ years.

What is the marginal value today of a given Google employee to the company's bottom line? Super low.

The tailwinds driving strong growth for these companies came primarily from macro/digitalization, not because they invented feature X which enhanced revenue

Not a good argument from you. As if the sheer number of employees is what made Google successful in the first place. And as if efficiency alone makes a successful company. Why would you think these things?

> Yet tech is such a small portion of the labor force that layoffs here basically mean zilch when it comes to the unemployment rate/inflation, and thus there's a long way for it to fall before the Fed adjusts policy

The really scary thing for me is the possible macro environment for tech.

Indians will soon overtake any of the Western countries as the largest English-speaking population on the internet. As I'm sure many of you know, Indians are hugely talented and most of us who had to deal with CS or Maths have probably resorted to some of the extremely generous Indian experts who teach these subjects on Youtube. There are some very good institutes and universities with solid reputations, many expanding to boot camps and such - so there is a very good volume of tech talent coming online fast.

So you have a tsunami of highly educated, English-speaking tech workers coming online AND a sudden surplus of laid off tech workers in the West. It could potentially get really ugly for the Western tech workers used to six figures for working 30 hours per day and then spending the rest of the day on activism or "day in the life of a X" Tiktoks. After all, we just tested remote work and you can live like a king in India for much less than even the cheapest Western town.

> tech workers used to six figures for working 30 hours per day and then spending the rest of the day on activism or "day in the life of a X" Tiktoks

> You've never worked a job that isn't 30 minutes of work and then the rest of the day is posting "day in the life of a FAANG employee" Tiktoks or being a paid activist.

That is incredibly not what it's like to work in tech in the US. I doubt you've been anywhere near a big tech programming job.

This gets said in every conversation about remote work but this has been the case for a few decades now. If the software business was just about chucking commodity CS grads at problems and YouTube videos and the man month theory was true then everyone would be running their companies on batteries of commodity Devs already.

>It could potentially get really ugly for the Western tech workers used to six figures for working 30 hours per day and then spending the rest of the day on activism or "day in the life of a X" Tiktoks

I don't know where you work but the people actually doing the core work that drives multi billion companies don't work like this.

Multi billion Companies aren't stupid they aren't paying these salaries because of cost of living they're paying them because the economics mean get more value from the work done than they're paying out. The best developers in India already get hired by FAANG and they're working in SV.

Have you ever worked with an Indian company? I am just laughing each time I hear huge talent pool. So maybe your top 1% is incredible but they already left the country.

Damn 30 hours a day sounds like a slog though.

Unfortunately I agree but what can we aka a western tech worker do to combat this?

You say that like these well established tech companies (like Google) haven't already optimized the employee counts and employee salaries needed to produce the (current) best ROI and also figuring for future company growth.

A bare-bones, scrappy team makes sense in the startup world but not the publicly traded enterprise engineering world. Move Google back into this world and it'll quickly crumble in a few quarters.

Has any tech company that laid off 50% of it’s employees survived? Maybe one or two. That would seem to indicate that the 50% number is too high.

Perhaps you see it as 50% as like when people say they only need 10% of the functionality of MS Word so they could drop 90%. Except that 10% is different for everyone.

> The truth is that a majority of tech companies don't need 50%+ of their employees.

Then why are they hired? It can’t be image alone

Because managers are evaluated on their ability to grow teams and increase their scope. Organizations intrinsically "want" to hire.

What's unusual about the last 20 years is that there's been so much available capital to fund tech companies doing just that.

Growing your office plankton messages to investors that "we are growing, give us more money".

There is constant pressure from upwards to "increase scope" and hire more people.

The same reason a product is never finished and there is a never-ending churn of "features" nobody wants or needs.

The bureaucracy expands until external factors force it to stop or contract. Google Search and Ads are a small percent of the company but nearly all the revenue. It’s not hard to see how that can lead to runaway bureaucracy.

If they don't need 50%+ of their employees they probably need don't need 95+% of their management.

The key is competitiveness. If all your competitors are improving their offerings year over year, you must do the same. If they all cut staff and stall on development, you can too

Unemployment in the Netherlands is historically low.

But can people who work in tech become teachers, nurses and police officers? I am not sure.

That's probably true-ish, but remember the saying, "keep your friends close and your enemies closer"

Aren’t we complaining we can’t reach anyone human at Google Support?

So nothing will change then? Instead of 135k people not answering the phone and telling you to go F… yourself you’ll only have 120k people not answering the phone and telling you to go F… yourself. Or maybe Google has amassed so much AI knowledge that all of its employees can be replaced by a single Raspberry Pi that doesn’t answer the phone and responds to all inputs with go F… yourself! A hundred years ago you would have had to pay a million people a penny a week to sit around not answering the phone and telling you to go F… yourself to achieve the same effect. Hard to believe the human race has come so far so little time.

But what’s more amazing is AWS support, because they answer the phone, and they solve your issue, and that’s the trick nobody else seems to be able to master.

They could hire entire call centers in poorer countries for the cost of a few engineers. That's a prioritization issue on their end

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.

I’ve gone thru those it a few times - while most all other companies were doing hiring freezes or layoffs as well. It’s times like that that employers really squeeze every last bit out of those “lucky enough” to stay around.

So several times I've had the opportunity to join fast growing startups that offered quite a bit more compensation, and equity as well. One of the things that I always took consideration of was the stability of the company vs where I was at.

Many of these people made a bet that working for Robinhood would pay off, it didn't that is part of the risk that came with the SV salaries, and the stock. I get that it sucks, but it seems like it is part of the parcel that comes with joining a VC backed startup.

Do people really not consider company stability and long term projections when choosing where to work?

Name one company where you could be confident there's no risk of being laid off. Big companies definitely go through downturns and cut significant chunks of their staff, and you're even less likely to be able to do anything about it there than at a small company.

> confident there's no risk of being laid off

Companies are ruthless, but that's a straw man. Risk is not all or nothing.

The company I work for is profitable. That fact alone lets me sleep at night.

This isn't based on any insider knowledge, but I will be very surprised if my current employer, Roblox, has layoffs in the next couple years.

Pretty sure they laid off at least recruiting and ops staff today

Why do you think that? I didn't hear anything about it.

Sufficiently big companies have a union and more financial buffer to weather downturns.

Public companies have shareholders to please quarter-after-quarter. If the markets remain bearish for long, public companies will have to do multiple layoffs as they restructure their operations.

Private startups, especially well-capitalized ones, have only their Boards (mostly, founders) to answer to. They can be, counterintuitively, more stable job-wise than many public companies.

Oracle is also doing layoffs today and would somewhat be in the stable class. It’s just like nature it just is. Think the thing to do is just take Larry Ellisons advice and GTFM.

Guide to financial management?

"Get The Fucking Money"

An [invented] Larry Ellison quote from "The Dropout", the Elizabeth Holmes Theranos TV mini-series funded by Hulu.

https://youtube.com/watch?v=sgd40T05KaQ&t=65

Solid effort

Stability is a bit of an illusion, as even profitable companies will do layoffs from time-to-time for a variety of reasons. When choosing where to work, I tend to look more at: Is this a reasonable business? Does management have a plan that makes sense? Do these people seem to have their priorities in order? Do I trust these people? Those questions hardly guarantee stability, but the right answers leave me comfortable that they've got a fair shot at it.

I’ve heard a lot of tech people not consider stability because it’s so easy to just get a new tech job. Everyone was hiring. Everyone was throwing money everywhere. Why be stable when you can find an employer easier than calling a taxi.

Obviously that’s over now.

> Obviously that’s over now.

Not even close.

For SWEs, I don't think it's over

That's a lot of staff - it means 1/5th of your coworkers got laid off...

I'm very bearish on Robinhood - I don't know if they have enough of a moat to defend themselves from other free stock trading apps. People have forgiven so many outages. The Gamestop saga was the straw that broke the camel's back for many.

The Gamestop fiasco rightfully killed their reputation among their absolute core fanbase who gave Robinhood the word of mouth that got them off the ground

Those people are never coming back and they're never going to have anything good to say about Robinhood

I like Robinhood and I have no problem with them having technical issues when users a flash mobbed a meme stock. In the end they learned what to do next time.

They weren’t technical issues; they were financial, business, and policy issues. And many people people either lost or think they lost a lot of money because of it.

Robinhood branded themselves as bringing power to the people but as soon as the people got the upper hand in a market, Robinhood turned around and screwed them. It’s a lot worse than a young startup struggling to keep up with explosive demand.

I guess when you give power to the people that means flash mobbing meme stocks. Not something traditional institutions have had to deal with before. Traditional users as well who don’t see what happened as good behavior. Robinhood handled it as well as could be expected.

Why do you not have a problem with them having technical issues (if they were technical) given that people lost money because of it?

Because it was atypical behavior that any institution would have the same problems with.

Not to mention they are screwed if congress passes legislation to ban selling order flow to firms like Citidel.

All the discount brokers will go back to charging $5 trade. Will be a big loss for retail investors.

> Will be a big loss for retail investors

You mean it will be a big loss for retail traders

Fidelity doesn't get paid for order flow, and it has $0 trades.

I know I’m a mere small drop in a large bucket, but I take solace in knowing there were plenty of other drops like me that eventually wrecked that bucket.

Great game! Assuming you made the Inked game.

A lot of Robin Hood's growth in particular was driven by people gambling their stimulus money because they didn't need it to make ends meet, and by the Fed juicing the markets with low rates for far too long, and by the ridiculous meme stock phenomenon. It was a perfect storm of stupidity.

Personally I'm glad that some sanity is returning to investing, and we are still a long way from getting back to normal.

The hardest part of this to me to deal with is that it’s the truth. For decades, the conservative line was if you give people money they’ll just blow it on gambling and booze. Turns out it’s true.

Ah yes, it’s completely fair that the only people who should be morally allowed to participate in the financial apparatus that sometimes leads to getting rich, are the people who are already rich. I see no incongruities whatsoever with this logic. rapid eye blinking

Bunch of people lost money. Some of them got rich. Booze is good and gambling is fun and it’s ok to blow their own money on exactly the things that everyone else blows their money on.

(This hits on the idea of “accredited investor,” and I have such a hard time not calling out that it’s a mechanism for already-rich people to participate in every deal that could make not-rich people rich. And that there are very few other ways to earn a fortune when you only have $10k in the bank. I lost my dad’s $11k when mt Gox exploded, which is objectively stupid. Meanwhile my friend is now a multi millionaire simply because he didn’t lose his coins and didn’t sell them. Was he stupid? Did I blow my money on gambling, but he was just lucky?)

Didn’t mean to rant, but it is what it is. You’re not wrong though.

The accredited investor rules aren't what's locking out individuals from getting the deals that are actually worth something. Those deals are already buttoned up by the connected VC folks. Look at the endless string of ponzis that get advertised to a typical doctor or dentist, that's all you're missing out on.

I agree that the rules are overly crude and that in principle there should be some more equitable way to achieve the same way. But I'm also very confident that those rules have stopped a lot of people losing all their money and killing themselves.

> Meanwhile my friend is now a multi millionaire simply because he didn’t lose his coins and didn’t sell them. Was he stupid? Did I blow my money on gambling, but he was just lucky?

Yes. You both did a stupid gamble and one of you got lucky for now. There's no broader lesson to take from that.

> Ah yes, it’s completely fair that the only people who should be morally allowed to participate in the financial apparatus that sometimes leads to getting rich, are the people who are already rich.

I agree with your overall point, but to be clear, we're talking about day trading. There's a lot of arguments you could have about banning casinos, pro and con, but "hey, some poor person might win big on the quarter slot machines" isn't a good argument.

Also, the median "accredited investor" is a dentist from Topeka who's about to get suckered by an advance fee fraud. Being an accredited investor doesn't automatically give you access to good deals. There just isn't a pool of amazing investments out there hungry for capital but being stopped by investor protection laws. (But there is a pool of scams...)

(Note that I'm not saying that the system is good or fair or just; I'm just saying mechanically, accredited investor laws aren't the part of the system stopping you from getting rich.)

Accredited investor rules exist so that your average person isn’t scammed into penury from a fraudulent investment.

Accredited investors suck at due diligence as is, and Joe Everyman can barely understand their own bank statement, so those rules exist to prevent them from getting raked by extremely questionable investment offers.

Many people need that money.

It's absurd Americans judging at normal people spending money, but same people ok with companies making record profit during pandemic, the minimum wage limit etc. It's pathetic.

No kidding, a few well off tech bros use the stimulus to gamble and suddenly every family who actually needed that money was a waste? Was the government just supposed to lower taxes for corporations and the rich yet again?!

And so what if it is? With the rate that tech is going to be putting people out of jobs, most folks are going to have shit for options.

Let the privileged folks have their fun, so the unprivileged can eat and not worry so much.

> And so what if it is?

Causes asset inflation making them out of reach for the 'unprivileged'. See housing market.

And a massive increase in crypto scams. And a massive increase in collectibles prices like trading cards and old video games. So much cash sloshing around. Everything inflated except the consumer price index (especially if you adjust the automotive, fuel, and electronics sectors of CPI because those price increases reflect supply issues rather than stimulus demand). Where did all that money go?

The untargeted stimulus just enabled mob madness and scams paid for by tax dollars. Wealth redistribution from the tax payer to the dishonest and lucky.

It's hardly surprising that given breathing room, people who live in miserable poverty will spend on things they couldn't previously afford. "Man cannot live on bread alone" is a pretty old concept. As for the people who already could afford the necessities of life, why not have a bit more fun than normal?

This is why my country forces people to put a part of their monthly paycheck into a retirement fund.

Most people just have no financial skills and will just get slaughtered on the stock markets. Others refuse to save money for their retirement at all.

The same realization applies to UBI.

What we had, in effect, was the closest thing we will ever get to a nationwide short-term UBI experiment and it was a complete disaster.

The worst fears about UBI were realized with just a few payments: people gambling with the money, creating stock bubbles with meme stocks, and contributing to a rapid rise in inflation.

People will say that wasn't really UBI -- but it's the closest we have ever been to it and probably the closest practical implementation we could ever expect from our government, and with "real" UBI people would have been given even more free money.

The problem is being smart lands you in positions of power today but being wise has no value towards that.

Everyone knows UBI can’t possibly work but enough people who are or think they are smart will find every way possible to convince themselves and others it not only can work but it’s obvious why it will. Ignoring thousands of years of humans that said “no”.

We have a paleo-phobia problem today where for whatever reason there are a lot of people that are pretty sure the entire history of humanity has been wrong about most things and we are the fortunate ones to know better, today. Without ever considering that we are possibly just cascading our problems due to our unwise choices.

Regardless, history has shown that decadence is the end of a culture.

> People will say that wasn't really UBI

Which makes sense, because it wasn't. A key point of UBI is its consistency: you know you are getting that money every month, indefinitely, and therefore can plan/budget accordingly.

A one-time payment? Okay, sure, I can use that to cover my rent this month, but then it's not doing me any good. So why pay my rent with it when I can go gamble with it and maybe luck out?

> and with "real" UBI people would have been given even more free money.

tldr: the point isn't the amount of money, it's the consistency.

    people gambling their stimulus money because they didn't need it to make ends meet

How did you quantify this statement?

One estimate puts it at $170 billion extra flowing into retail investing.[1]

Also, it may be reasonable to use the savings rate as a rough proxy. That rate was higher than it has been for decades when the stimulus was active and has since dropped. [2]

[1] https://www.nytimes.com/2021/03/21/business/stimulus-check-s...

[2] https://fred.stlouisfed.org/series/PSAVERT

I am willing to bet they didn't factor in the whole meme stock craze.

Zero of our stimulus went into buying said stocks, however I did make a bucket load from GME and AMC prior. Our stimulus went into further "stimulating" our savings account. The money I spent with Robinhood was entertainment money. It just happened to pay off big.

A more conservative estimate places stimulus "meme stock" trading at less than 0.1% of the stimulus.

I made a bucket load in 2020 and 2021 and didn't qualify for a stimulus check based on income. How are we defining bucket load?

I think the fact that people just discovered that government deciding to put the country under house arrest is the thing now and they can be out of the job and not allowed to leave home at any time now - and started to save more is kinda natural behavior in these circumstances.

How much of that was due to inflation? People could just be trying to get rid of cash.

I had a bunch of excess cash due to falling behind on D.C.A.-ing, and I accelerated that (which was not a good idea in the short term, but that's what D.C.A.-ing is all about - wish I hadn't fallen behind on it over the years!) and bought a bunch of under-par bonds and utilities for the yield, sold a lot of now-expired SPY puts and stock calls too ;) More trading than I've done in my life, mostly because of inflation, not stimulus.

It’s possible, but I don’t think that was a major factor. It wasn’t in the linked article and inflation was much lower during the stimulus. When it was creeping up, initially people thought it was transient. I don’t think most people know what the inflation rate actually is; I asked someone yesterday and they said “close to 50%”.

In my industry the wave of stimulus definitely caused behavior changes, it was pretty distinct.

Obviously, a lot of people did need that money to make ends meet. But it's also obvious that some % of the population was able to treat it as money they were able to play around and have some fun with.

People should be able to do that. Is it just the rich who are allowed to make profit that way. Nobody is judging rich here what they do with their money. May be because people in hn are privileged.

neat, but not a meaningful response to someone asking for hard data.

They didn't, but I think most people would guess that is accurate. I know I do. I supported one of their open source infrastructure solutions(that they weren't paying for mind you) when SHTF.

If all we are doing is guessing, I would also guess that people being stuck at home with nothing to do but mess around with Robinhood played a big factor

There is unsurprisingly plenty of survey data about what people did with their stimmies. https://www.nber.org/digest/oct20/most-stimulus-payments-wer...

Yeah probably.

This reads like a boring classist commentor. Reddit is always joking/lying about what they are really doing. So no, stimulus checks didn't cause retail investors to become less sane.

People stuck at home, with extra spending money, and a desire for internet points, caused your deviation from normality in investing.

More like gambling fraudulent PPP loans.

What evidence do you have to support those claims about causes?

lmfao people gambled what, $1k? $2k?

sheesh...

Employment is a transitory thing. Remember this the next time you spend your life energy fixing something you could get away with letting fail.

As an employee you need to think like a mercenary, ruthless, no loyalty, enrich yourself, get the job done but not at any cost to yourself.

Yes. Try to be a cold-blooded professional. Do your job without attachment. Your company is not your family. It will end one day, but you will still be going. What you take away is experience, learning from success and mistakes, connections, and most importantly - friendships. The rest is insignificant.

Robinhood... like robbing from the rich to give to the poor... hold on a minute! What a name for a huge public corporation in the US. They almost had me!

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).

SIPC pays out eventually. If you routinely withdraw money from your brokerage account to pay for expenses or are doing anything fancy with options, you may not want to twiddle your thumbs for months while the bankruptcy court chews things over.

https://www.sipc.org/for-investors/investor-faqs

>Once a customer claim is filed, the trustee will research and analyze the claim and then mail to the claimant a written determination either allowing or disallowing the claim. If the claim is allowed, the trustee will satisfy the claim through the distribution to the claimant of “customer property” or advances from SIPC, or some combination of the two.

>How quickly claims are satisfied depends on the complexity of the liquidation and the condition of the failed brokerage firm’s records. Delays of several months can arise when the firms’ records are not accurate or incomplete. It also is not uncommon for delays to take place when the brokerage firm or its principals were involved in misconduct. When the records of the brokerage firm are accurate, and no misconduct occurred, deliveries of some securities and cash to customers may begin shortly after the Trustee receives completed claim forms from customers. Generally, in these cases, customers may receive at least some of their property one to three months after filing a completed claim form.

Not sure about SIPC but the FDIC usually gets involved before the bank actually goes insolvent and helps find a plan to keep the accounts active the whole time (eg sell to bigger bank without insolvency issues). Very rare to reach the point of people needing to file a claim.

Anyways i don’t know how SIPC works but I bet it’s similar. Also if Robinhood can go under then so can lots of other neobanks so I’d be worried about money in all those accounts.

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

Presumably there's some delay in the recovery process during which you cannot access or trade your assets. Crypto is also explicitly not covered.

You actually want to have to rely on insurance? I would hope that my brokerage can at least stay solvent ffs.

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

“Robinhood” my ass

>Aren’t they selling the order flow of retail traders?

...and getting price improvements. See: https://news.ycombinator.com/item?id=32325223. I don't see the issue here.

What's wrong with selling your orders to a market maker? You get a better price.

other brokers do too..

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

I wasn't involved at all with GameStop, but it was enough for me to switch. Schwab's app isn't as modern, but I have a lot more faith in them.

I transferred everything out of Robinhood just this month. So long!

“While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions.”

What they write:

"As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me. "

What he totally forgot to mention:

"I also take a pay cut to reduce the opex burden on the company and to retain as many FTE as possible"

Silicon Valley (the satire TV show) already covered this exact scenario. Mike Judge is a brilliant writer.

https://youtu.be/u48vYSLvKNQ?t=17

Amazingly on-point. The entire show, at least the first few seasons, is still a mirror of reality in SV.

"Some of you may die, but it's a sacrifice I am willing to make," - Lord Farquaad

His salary is like $300k and the stock options he was granted as the pandemic growth hit break even at some $300/share (it's $9/share right now).

Elsewhere in the thread, others mention he was paid 800 million in stock awards in 2021. Do you have some other supporting info?

The 800 million number seems to be better supported via a quick search - https://www.execpay.org/executive/vladimir-tenev-42307/r-186...

In the past year he sold $55 million of shares. Let's don't be too credulous about cries of poverty.

"Some of you may die, but it's a sacrifice I am willing to make"

ZAPP: Men, you're lucky men. Soon you'll all be fighting for your planet. Many of you will be dying for your planet. A few of you will be forced through a fine mesh screen for your planet. They will be the luckiest of all.

Lord Farquad and Zapp B would make great CEOs.

swinging the ax I take full responsibility for this

This axe is heavy, and the destruction wrought by it saddens me. I need to be compensated for this.

"One who passes the sentence should swing the sword"

If it's good enough for a lord, must be good for the CEO.

Are you complaining that when they cut their pay from 400k to 32k that wasn’t enough? Or are you complaining that they didn’t cut their 32k salaries down further?

I mean, if you think "salaries" doesn't include 800MM in bonuses (the number that's been thrown around), then you're speaking differently than others in the thread.

Which people did that?

> I approved and took responsibility for our ambitious staffing trajectory—this is on me

It's all well and good to say that, but what has he actually done to take responsibility?

Nothing of course

"Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022..."

We are now at the point when we will find out which of the changes to behavior (financial and otherwise) that came about with the onset of the covid-19 pandemic are going to be lasting, and which are not. I do not claim to be able to predict which ones (if any) will last, but I can confidently say that Robinhood is not the only one to have been surprised by changes which they thought would "stick", going back to pre-covid norms.

All of this has already happened. Just look at the stocks of all the pandemic companies. Peleton, Teledoc, Zoom, Docusign and on and on. Pretty much all down 80%+ from their highs.

If anyone had any notion that the markets were efficient or rational in any way regarding the actual underlying value of the companies they purport to represent, I certainly hope that notion didn’t survive the pandemic - I’m not sure what world stocks were pricing in over the last two years, but it didn’t pass even a cursory smell test.

It's still going on.

Nikola, a vaporware company with absolutely 0 revenues burning $600m / year, is still "worth" $3b.

HKD, a vaporware company, is being pump and dumped and is now "worth" $150b+, the size of Bank of America, despite being 50 employees with nothing of value.

https://www.reddit.com/r/wallstreetbets/comments/wegalp/hkd_...

The only way I can understand the Efficient Markets Hypothesis is as a way for academic economists to explain why they personally have not gotten rich trading stocks.

It's rational on the predication of completely absurd stories about growth trajectories.

It's what happens when a bunch of dumb money comes into the market

the market is the most efficient place you can put your money, and the companies that underlie the market are the greatest stores of value with the best growth opportunities we know of, and the pandemic didn't change that.

Dying to hear where else you suggest putting investments...?

If anything, the current situation is a demonstration of the opposite. The claim that markets are efficient and rational is based on long term price finding. This includes a lot of noise. If Peleton never makes a profit, the market will eventually find the correct price.

Any institution that invested in "home workout" stuff deserves to lose every dollar they put in, how could you not see that coming.

Would you say the same about working from home generally, which seems to have more staying power (even if we are seeing some return to office)?

It seems not-crazy to me that someone would have thought that WFH was going to stick around post-COVID and thus also make people want to keep being able to work out from home.

Conversely, did you see it coming and make a ton of money?

Next up, the remote work craze. Everybody thinks they are super productive working from home but on a larger scale I imagine it took a huge hit.

Plus it is dystopian as fuck. People need to be around people outside of their immediate family to stay sane and I promise you most of these new remote workers are basically never interacting with people outside their small bubbles.

It’s gonna swing back. Calling it now. A ton of people I’m know made some seriously impulsive moves into houses way out in the middle of nowhere thinking this will last. It will be interesting to see how well their bet paid off in a year.

Not sure why commuting two hours a day into the office to sit at an open office desk is any less dystopian.

Not sure why it’s so hard for people to understand that there’s a solid chunk of the population that gained nothing from it.

> A ton of people I’m know made some seriously impulsive moves into houses way out in the middle of nowhere thinking this will last

I've seen it too, and I was really surprised because a house is a 5+ year commitment, and it wasn't (and still isn't) clear WFH will be commonplace that far out.

COVID and lockdowns literally gave the majority of people social anxiety. They won’t give their WFH up easily.

Plenty still use Covid as an excuse to avoid returning.

Just saying, the ones who might end up being surprised are those who think that the crazy days of 20/21 are definitely over. For all we know, it's just summer now. Not that I don't dread further lockdowns or even necessarily expect them, but I have them on my list of possible scenarios.

Oh we will be getting locked down again in the fall I am sure of that. Canada didn’t upgrade it’s definition of fully vaccinated for no reason. Come fall those “fully vaccinated” will be allowed to enter restaurants and work while those who oppose further shots will be told stay home

Hard to convince people to lockdown when they see their friends and family getting Covid and bouncing back in a week.

There was legit fear of the disease in 2020-21. It has now morphed into a strong flu - and the data shows it.

I am willing to bet $100, through any escrow mechanism of your choosing, that we are not getting locked down again. There’s no appetite for it, and no reason to do so. Vaccine requirements are not a “lockdown” though by any common understanding of the term.

We’re witnessing a reversion to the mean. A lot of companies are facing a tough reality - especially those with poor cash flow.

A lot of the numbers I’ve seen are basically a reversal to an existing trend line projected into 2022. Maybe a bit of “rebound” behavior for things that were possible (eg travel).

I suspect we’re going to see a regression of most new trends. Especially anything that felt too related to lockdowns.

There prior earnings had substantial revenue from crypto. That’s mostly dried up. Then you’ve got the GME reputation hit.

Meanwhile fidelity who avoided crypto and has a great reputation saw & continues to see growth

What? Fidelity has a huge digital assets division and literally added Bitcoin as a 401(k) option

They didn't avoid cryptocurrency..they've been mining. BTC offerings in friendly nations (Canada).

It should have been obvious to anyone that people would do less day trading once they had anything better to do.

Or when making money became harder.

Amazing the number of people I personally know who took 1 year of day trading to be the “norm” and made big life decisions based on their results. From quitting good jobs to buying houses they can’t afford, all because they made big money in 2021 and thought they could keep repeating it every year.

To any one person, sure. But, as the saying goes, "None of us is as dumb as all of us."

Once you start move into the realm of group decisionmaking based on hypothetical future demand for $OUR_WORLD_CHANGING_PRODUCT, positivity culture starts to take over. Plenty of people in the room where the decision is made may be thinking, "But what if this is a passing fad and people don't really love our product in any sort of durable way," but nobody wants to be the one to actually say it.

I would even go so far as to say that those whose temperament would allow them to say something like that out loud in the boardroom generally don't get promoted into the kinds of positions that get you invited to boardroom meetings.

And once even throwing darts to pick stocks stopped producing big gains.

The same thing basically happened in the run-up to dot-bomb. It was really easy to make book with day-trading in 1999 or so. See also crypto.

Hindsight's 20/20? Why would we feel sure that people wouldn't keep up with habits they picked up during COVID? That seems like it could have been similarly likely to me -- someone picks up day trading, gets hooked, and now it's a regular habit.

Matt Levine called this the "Bored Markets Hypothesis" at the time. Seemed pretty obvious both then and now in hindsight.

I think people are going to be more tech focused as a result of the pandemic. I notice that the majority of my meetings, even mundane meetings, are virtual rather than face-to-face for example.

The big difference that is happening currently is inflation, recession fears, and fear among the general public about financial turmoil. The entire situation has been very poorly handled by governments and institutions around the world who seem to have collectively pretended that nothing was wrong. In particular inflation has been poorly fought because a huge percentage of the left wing were insistent that public spending would not cause inflation, but did not have a chance to implement that public spending in the 2010s due to the rise of the far-right so have absolutely nothing to show for it except inflation. Now the US is trying to cause a recession so that inflation and economy instability can be brought back under some resemblance of control, but the US is still acting as if it's the only major economic power in the world - Asia for example has been far less hit by inflation and many countries (including India) are not predicting a recession.

* unmute microphone

* "thats bull shit you took 800m in compensation last year"

* get fired without severance

* feel really good

I doubt there's an option to unmute your mic on the company-wide layoff announcement call.

Somehow I feel that all these VC backed firms just add employees for the sake of adding employees.

I use Tastyworks - another free online brokerage that it almost at feature parity with Robinhood. They have stocks, options, futures and even some selective crypto. They also make money using PFOF just like Robinhood.

However on Linkedin, their employee count is less than 100 (99 to be precise) On the other hand, Robinhood was at almost 4000 employees at the start of the year. I think they still have about 80% more employees than where they need to be.

Sure, but also, none of my (investing) friends use Tastyworks, and almost all of them are using RH as their primary investing platform!

Companies in hyper-growth stages may hire/fire differently than others.

Tastyworks was founded by the founders, CTO, and CFO of Thinkorswim. I worked on thinkorswim institutional desk for several years back in the mid-2000s. Not great brand recognition but a company built for traders by traders.

Isn’t thinkorswim just an arm of TDAmeritrade now?

> as their primary investing platform

:%s/investing/speculation/g

Very few people use RH as 'investing'. Those will be on boring brokers like Vanguard.

I have a Tastyworks account too - the fills are way better than Robinhood's. As expected, since they charge some amount per trade. But that means that the "free" platform will definitely have more users, just because it's supposedly free (even though you pay for it in the fills, and get frontrunning trades)

>just because it's supposedly free (even though you pay for it in the fills, and get frontrunning trades)

Can you provide a source for this? Citadel (one of the companies robinhood sells order flow to) claims in regulatory filings[1] that the overwhelming majority of orders are executed at market price or better, and that they on average save traders money.

[1] https://s3.amazonaws.com/citadel-wordpress-prd101/wp-content...

Wow, TIL you can use sed syntax in vi. I'm not a heavy vi user but that's still a handy trick. :-)

How are you quantifying that the fills are better?

I worked professionally on this problem a while ago and it was very hard to do even with full depth feeds direct from the exchanges.

Does that matter with brokerages. I don’t know if Robinhood has a chat feature that lets you chat with your friends while trading.

Customers matter for businesses, and they matter for businesses in winner take all marketplaces which has been the focus of VCs the last 10 years.

I used to work at a real time brokerage + national bank based out of the Midwest. The entire engineering+ operations team was 128 people, exactly. Including the CIO and his assistant who ruled the 39th floor with an iron fist, a hold over from the dot com era. They're publicly traded. I think they're down to 90 people but still running a functional company with tens of thousands of broker dealers. I have no idea how you need more than 500 tech people to run an online trading platform.

>Including the CIO and his assistant who ruled the 39th floor with an iron fist, a hold over from the dot com era.

Please explain? Is ruling the 39th floor a particularly [financial] in-joke?

AFAIK, it's just representative of status/power, but I don't know its origins.

A listing in The Urban Dictionary defines/describes it as: When an idea, movement or act has become very successful. To be propelled to great heights. [1]

FWIW, there's a band called The 39th Floor [2] that I like for its grungy/retro-ish rock. The band's name evokes, for me, the image of "high-powered execs", but I'm not sure how that association got into my head. (Possibly the track Koka Kola on The Clash's album London Calling [3], but that refers to a "51st floor", rather than 39th, to symbolise corporate success/power [4].)

[1] https://www.urbandictionary.com/define.php?term=39th%20floor

[2] https://the39thfloor.bandcamp.com/

[3] https://en.wikipedia.org/wiki/London_Calling

[4] https://genius.com/The-clash-koka-kola-lyrics

No that's just the particular floor we happened to be on. I think the bank was on 38 and the trading floor was... 32?, executive suite was 41 or something. We had like five or six floors in the upper third of the 42 story building and a bank branch down in the lobby. They probably would have liked to have contiguous floors but it would have been a lot of work to move the data center and trading floor just to say you had X floors in a row.

A startup is designed to grow as fast as possible until they saturate their market.

… and competition comes screaming into their short-lived dominance and leaves them reeling with a mountain of debt and no profits. Barriers to entry are quite small for tech companies, so it always amazes me when analysts and dreamy investors rave about how their favorite “unicorn” tech company will dominate or is “disruptive”. Their disruption and dominance is likely to be short.

>"They also make money using PFOF just like Robinhood."

What is "PFOF" here?

https://www.investopedia.com/terms/p/paymentoforderflow.asp

You are actually a bit closer to the truth than most. The goal of a CEO is to generate as much hype early on as possible in order to spur growth. They spend early capital on growing employee count to generate even more hype. This raises their own net worth significantly. When the company goes public, they will dump what they are allowed to, navigate the much more "public" waters for a bit, then walk away with a small fortune. It becomes a game of investor bag holding at some point. The C-Suite is almost never left holding the bags. It is always the investor. I'm not sympathizing with investors, mind you.

To be fair their mobile app was really really bad the last time I used it.

Isn’t Robinhood public rather than VC-backed?

Well they were VC backed, they recently went public. shrug

Biggest mark of utter management failure is making too small a layoff in April (9%) and needing to do another round today.

Combined that’s a 30% headcount reduction since Q1-2022

Please say more. Is the idea to get the blood-letting over with all at once?

Yes, it’s much better to cut fast and deep one time.

If you combine layoffs the reduction in burn can be pretty significant. The exact numbers vary per company but for a startup delaying layoffs by one month can be the difference between having one year of runway remaining or one month once all is said and done.

This is not the exact link I was looking for but goes into it somewhat https://www.ycombinator.com/library/3Z-advice-for-companies-...

> 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 millions by the SEC and other regulatory bodies, and saw its share price drop by 90%.

At this point "taking responsibility" would mean resigning and letting someone more competent fix his messes.

Are you talking about the ~$800M in stock-based compensation described here [1]?

Nearly all of that only vests if Robinhood stock hits price targets between $120 and $300 per share. The remainder requires a price of $50.75 to be sustained for 60 days. Since none of these goals have been met, Vlad has not received any of it. And unless the company turns around dramatically - it's currently around $9/share - it's likely he never will.

[1] https://www.sec.gov/Archives/edgar/data/1783879/000178387922...

I realize it's not something that happens, but I would say "taking responsibility" would mean taking, oh, I dunno, $50M of that $800M in compensation in 2021, and distributing it to those laid off?

(How the hell is your life different with $750M instead of $800M anyway?)

> Reminder that Vlad Tenev received $800M in compensation in 2021

No he did not in fact receive $800m. You seem to know a lot about the performance of RH stock, but you’ve completely missed the fact that the poor performance means he won’t be seeing that $800m worth of stock - almost none in fact.

He got a comp plan that could get him up to that much in stock if certain goals were met, but none of those have been met so he hasn’t gotten any of that $$.

Suffice it to say, if he had met those goals, they wouldn’t be laying off anyone, as their stock price would be sky high.

Robinhood's executive compensation clawback policy just FYI:

In March 2021, our board of directors adopted a clawback policy effective upon the closing of this offering. Under our clawback policy, our board of directors may recover incentive compensation from an executive officer in the event of (i) a restatement of our financial statements or a material error in the calculation of one or more performance-based measures used to determine the amount of such compensation or (ii) the executive officer’s “detrimental conduct” (as defined in our clawback policy) that results in an excess performance payout, results in legal proceedings or causes us material financial or reputational harm

ref. https://www.sec.gov/Archives/edgar/data/1783879/000162828021...

The Shopify layoff also contained this phrasing. Shows how tone-deaf these CEOs are.

Shopify's version:

> Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust. As a consequence, we have to say goodbye to some of you today.

An article I read on HN talked about the difference between being nice (saying something to appease someone) vs. kind (doing something that benefits another person).

It mentioned on the NYC Subway you will see a guy help with a mother's pram but not say a word. No small talk. No smile. They are kind but not nice.

Assuming the above definition, I would say this CEO is "nice" but not "kind".

>For Tenev to actually receive the full compensation, Robinhood stock would need to trade up to $300 per share over the next seven years, the company said in the filing.

It closed today at $9.23, so it's a fair guess that he's not getting anywhere near 800M value.

His job is to make big ambitious bets. These didn't pay off. CEOs are not hired (or retained) for the benefit of employees or customers, they are hired by boards for the benefit of shareholders, and shareholders in Robinhood were not buying for stable reliable dividends.

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.

Vlad Tenev received $800m for taking the company public per an RSU agreement the board gave him in 2019 and $800m was when the stock price was $50+. Nows its only worth $130m. Banking is standard with discount brokers, you have a sweep account that is probably on an FDIC insured bank. GME issue was a lack of capital to settle GME trades. They owed $3 billion to NSCC. Robinhood was insolvent but people always flock to conspiracy theories on why Robinhood pulled GME trades. I am curious what would be the better decision for robinhood with the GME issue?

I don't use Robinhood but do benefit that my trades at other discount brokers are now free.

I read this as saying "This is not happening because you did a bad job, it's because I did a bad job".

An important thing to mention at a layoff.

Taking responsibility would mean returning a significant portion of that compensation.

Reminder that Vlad Tenev founded Robinhood, an incredibly successful app that disrupted an industry and is still best in class. There really is no replacement for a founder CEO.

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

"With big money comes big responsibility, so I took that responsibility and I'm going to take more of it next year. As a result of my increased responsibility, 25% of our staff will be given new opportunities this year and 25% more will see even more opportunities next year. Stay tuned."

When I was a young boy in Bulgaria people would be laid off left and right and nobody complained.

I hate this BS lately with CEOs claiming it's "on them" and "their bad decisions" as if that somehow makes it all okay. There is NEVER any repercussions for CEOs when they fire/lay off no matter how many people.

So if it's on you, how about YOU lose your job?

No?

Oh well then.

i’m positive vlad feels like he did something hard by “taking responsibility.” but he loses nothing and some former employees are now in a precarious financial situation. his skin in the game is nothing compared to theirs.

At this point, unfortunately, "take responsibility" it just a PR phrase. It doesn't come with any consequences, responsibility, or costs to the individual in the corporate class.

At first I was like "jesus christ this is going to be a bloodbath" and then I read your post and thought "huh yeah i guess it makes sense they are firing people."

The beauty of corporatism - unlimited upside and no downside.

How much of that compensation was in Robinhood stock, which dropped 90%? How much of it vested?

These aren't rhetorical questions, I'd like to actually know these details.

> At this point "taking responsibility" would mean resigning and letting someone more competent fix his messes.

Your derision is probably blinding you from the solution that's most likely to produce the best outcome -- him learning from his mistakes & cleaning up his own mess. Resigning won't be a magical fix-all.

It's actually ironic that your definition of "taking responsibility" is him quitting and having someone else clean up his mess. Paying back a portion of his stock based compensation from 2021 or forfeiting his comp going forward would make sense though.

Yep, talk is cheap. Of course he's responsible, whether he admits it or not.

If not willing to step down, then give up pay.

It is worth repeating this.

800M is more money in a single day than a very large number of people make in an entire lifetime.

And giving a million bux to every one of the saps that got laid off. He's a crook.

> ... 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.

Ya, the board and the VCs didnt care about that at the time.

There are talks of "late stage capitalism" all over the place - I think CEO compensation is one of the biggest hallmarks of it. Capitalism is supposed to naturally reward value creation to incentivize further value creation - somehow we've found ourselves in a situation where folks on the bottom of the pyramid aren't going to get incentivized for efficient labour no matter how much value they create - while folks at the top will be gloriously celebrated for even the most abject failures.

Most people are doing their best to be productive and most of their managers are trying to reward these efforts with recognition beyond a "thanks" but it becomes more difficult to do when we have an insane wealth sink at the top of our economy.

No one’s forcing those employees to stay working there. If he’s that bad people can just leave and work for a company that they like.

This is why we need wealth taxes. Confiscate the lot.

how much of that $800M was in stock vs cash?

I said the same thing. Taking responsibility doesn’t mean “I acknowledge that this is on me.” Of course it is. How about some accountability? How about getting your pay clawed back etc? Just “taking responsibility” is lip service.

> ”In his message Tuesday, Mr. Tenev said the new round of changes at the company are particularly concentrated in its operations, marketing and program management departments.”

People here on HN often say how bad is to be an engineer in a non-tech company. It seems that it’s much worse to be a non-engineer in a tech company.

In general the non-engineers at tech companies get treated pretty well and I don't think they are more likely to get laid off than they are at other companies. They also generally get the same kind of RSUs/options/stock comp as anyone else at the company: those are not normally restricted to engineers, although engineers often get more compensation than others.

Marketing, advertising and sales people are especially vulnerable at any company: if the company expects consumer confidence and purchases to decline, those are some of the first roles that get cut anywhere.

We honestly aren't treated better, and as you point out, are usually the first out the door. This has been my experience as a marketer over the last 16+ years. So, so many of my compatriots let go in these lean times (and often not backfilled), leaving those left behind to do 2-3X more work and get the ol "you're lucky to have a job!" speech. I've been laid off twice in my career, despite being considered a high-performer, once mid-way through Covid, and am staring down the barrel of another looming layoff. Honestly, being a marketer sucks but I don't know what else to do at this point.

As a nontechnical person, I can say I don't blame co's for cutting these roles first. Marketing, HR, program management, etc. are great at creating additional layers and busywork that makes it seem like they're absolutely critical to a company functioning. I was mostly in sales/bd and what I did love about the job was that there were pretty objective criteria to look at to see performance- how many partnerships or deals were in the pipeline, how many did you close, what dollar value, what was the csat on closed deals, etc.

I don't disagree on cutting these roles first, but I don't think it's a function of these roles being non-important; rather when a company stops growing these roles have less utility. Less about the role and more about the company priorities which shift when growth stalls. No one is sales is going to advocate for less marketing spend.

Same thing I would say.

In my view the difference between a tech company and a non-tech company is what percentage of the company's value is stored in the intellectual property rights of their software. The higher that number the more of a 'tech' company you are.

In non-tech companies software engineering is a cost center and at tech companies things like operations are cost centers. In both cases you need them for the business to function but they don't deliver lasting business value on their own so you look to minimize costs.

Many non-tech roles have the problem of being easily replaceable while many tech role have the problem of being expensive.

Some company will always need a person who can actually make things work, definitely.

Why not cut pay across the board?

I know this is not the cultural norm, but I am curious how long this norm can persist.

Without the ability to cut pay, layoffs are the only option for companies burning cash and losing altitude. That locks pay increases at the same inflated point that the bubble supported but which reality does not.

To go one step further, is there a single advanced economy in which pay cuts, rather than layoffs, are the norm?

Because then you'd still have more people than you need, except now everyone is poorly motivated, and your best people will just leave.

Germany does actually have a model called "Kurzarbeit" (literally "short work") to reduce hours across the board while some of the wage losses are being offset by payment from the unemployment insurance system. The idea is to avoid layoffs during times of recession etc. which would allow the companies to bounce back more quickly once the situation has picked up again.

I worked at a startup that tried that. Within 4 months, a good chunk of the best tech people were gone. Within 12 months they had gone under.

Maybe for an economy-wide recession where your workers have no other options. But if it's just startup risk that are making you founder, you're basically guaranteeing a death spiral. There is some chance if you make it a fixed-term paycut with a payback with interest, but you better have a real cult leader as CEO to get people onboard with something complicated instead of just getting a job at Google.

With the job market still being as strong as it is, cutting pay like that would be a disaster.

If my employer told me they were cutting my pay by 20% one morning I would already be out doing interviews by the afternoon.

With layoffs you at least control what talent you are giving up in exchange for a smaller payroll. With across the board salary reduction, your most talented employees will get up and leave and the people who remain will be demoralized and poorly motivated.

Short answer: your best employees will leave

My dad's company reduced pay in the 2008 recession I believe. I don't think they laid anyone off, at least in his department.

You never cut salary. That’s the best way to get people to leave. If they are good they can find another job with a raise.

It can work to some degree especially at smaller companies where cash flow matters a lot.

I experienced this in the dot-com collapse but probably ripping off the bandaid is a better approach in many circumstances especially when cash flow isn't the driver.

At this point I think the best thing for Robinhood might be to just get bought up by a larger bank and converted into some kind of separate-but-integrated offering with an international focus, competing with companies like Revolut.

Remember, something. Everyone who says companies could lay off 50% of the stag and keep working great is probably the person who needs to be laid off first.

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me

So, find a decent replacement for CEO.

It's just a turn of phrase... usually "it's on me" just means I've acknowledged what you might be thinking and I'm going to continue doing whatever I want.

... and at the same time trying to show they're a great because capable of acknowledging errors.

He's basically saying, RH over-hired, and now is correcting that mistake.

With that view, a competent CEO wouldn't have hired those people to begin with.

If you use that self-admission as a reason to fire him, the excess labor still loses its job.

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 least something, but obviously no such thing happens. Once again the difference between caring and not caring is zero.

"We care about your privacy" except for the 20 years of prior tracking where we didn't. And actually still don't as we annoy and mislead you to keep doing it.

A web of lies. Optics, zero substance.

This is where we balance it out with unions. Unions have historically gotten us everything today that most people think is just SOP.

Limited work weeks (40 hrs). Monday thru Friday as business days. Paid vacations. Family and medical leave. Breaks. Paid holidays. Sick leave.

It’s a shame there’s been a massive push from corporations pushing anti-union propaganda. We have been complacent.

We need unions to make our voice heard. Both in the mega corps and local/state/federal governments.

"By and large, language is a tool for concealing the truth."

— George Carlin

One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted. Most people are rather confident of their ability to recognize bullshit and to avoid being taken in by it. So the phenomenon has not aroused much deliberate concern, or attracted much sustained inquiry. In consequence, we have no clear understanding of what bullshit is, why there is so much of it, or what functions it serves.

On Bullshit, Harry Frankfurt, Princeton University

http://www2.csudh.edu/ccauthen/576f12/frankfurt__harry_-_on_...

Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed.

A useful insight I’ve internalised is to ignore what people say and look at their actions in terms of money.

As in: “Ours is the most reliable product!” Is just empty puffery, but cash-money-back warranty terms exceeding all other products in the market is a statement with real meaning.

“We care about our employees” is free to state and worthless. Golden parachutes are expensive and valuable.

Etc…

A similar statement is: “Don’t tell me your priorities, show me your budget and I’ll tell you what your priorities really are.”

I don’t think humanity has ever not been morally bankrupt. Politics has always been immoral. Industrialism has always been immoral. Slavery was commonplace. We used to have feudalism and nobility.

Morals are only applicable to those who have no choice and power to choose otherwise.

> "we care about your mental health" as is the common internal email from HR

I told my last boss I needed to take 3 months off because I was severely burnt out, without pay or benefits of course, and I am sure the team could handle it because there were 10 other devs including me and we didn't have that much work to do, and guess what happened? That's right, got fired a week later. I literally built the team, including hiring the team manager (I'm not interested in management), and built the first version of the product my team was developing and they didn't care; they wanted to eliminate my weakness. Their stock is worth 1/4th of what it was when I was "let go", so I feel pretty happy about that (because I'm a prick).

Company I work for gives international Mental Health Day off, October 10th.

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

The problem is moer that we can't do anything about it. It's not enough.

You're absolutely right. Taking responsibility would be resigning.

If a normal employee missed their goals by this much, they'd be on a PIP and out the door in less than three months.

Rules for me, and rules for thee.

The age of rationalization

Coinbase for instance...

Good riddance.

Robinhood has been the shining example of what Fintech should NOT be.

It's only benefit was encouraging other brokerages to be more competitive.

If Vlad Tenev is accepting responsibility he should resign. What a dumpster fire company.

Reddit will be telling me this split is just like a dividend too.

They were still in business?

its worse than any other broker, so there is no reason for it to survive

Good. Problem is, fewer of those vultures means even bigger one survive. Just can't win.

Right sizing not layoffs

That’s a significant RIF

Is there at least one player in the crypto space that is too big to fail?

We probably shouldn't worry until Biden redefines a recession to two quarters of negative growth.

".. ambitious staffing trajectory".

Read: We were spending money on new hires like a drunken socialist sailor to show "growth" to keep the bubble going and sucking in even more VC money. My bad.

Tired - burn rate, wired - hiring rate.

Who would've thought that scamming people isn't a good business-model in the long term?

RH pretends to be a "broker" and:

1. lets people trade "stocks" that aren't stocks the way people think they are. All (convenient) trades (for its HF clients) get internalized and never ever hit any lit market/exchange. The fact that this is possible is a general issue with the US stock market and lack of meaningful regulation and policing. This is not unique to RH: https://www.youtube.com/watch?v=wg8onYvJW3Q

2. its entire business model revolves around selling a "front running service" to RH's hedge fund clients, so they can front run RH's users/retailers (who are NOT clients) on every single trade. The front running service is called PFOF and is illegal in a lot of countries, but not in the US.

3. Literally turns off the buy button temporarily when it's convenient for its hedge fund clients to manipulate a stock price to go in their desired direction. This is so mind-blowing that I probably need to provide a source. Here it is one: https://www.investmentwatchblog.com/robinhood-president-sold...

too bad this is apparently not common knowledge. Let de down-voting by RHs few remaining social media managers begin.

Source on your first point? Sounds a conspiracy from r/superstonk

Yeah the 1st point is a "conspiracy" in that it's simply not true and what people who dislike Robinhood share amongst themselves as truth.

Robinhood has lots of problems, this is not one of them.

[edit] Forgot about fractionals where this statement is true, but that's well known/accepted?

I removed the reference to synthetics, because it is indeed a conspiracy/speculation (there can't really be evidence for it even if it's true). Though it has happened in the past and has been documented. Source: "Naked short and greedy" book.

There are some more hints though for the whole synthetics conspiracy ongoing. The most recent one, going on right now, being the GameStop stock split through stock dividend failing in Germany, because of DTC/DTCC issues.

These types of splits are not uncommon (Google did one a couple of weeks ago without any issues: https://capital.com/google-stock-split) and I've never heard of a stock split failing due to clearing issues before.

So there's that.

I think the OP meant buying partial stock? afaik those are not real trades; robinhood has to house the trades on their books to some extent

What’s the difference between PFOF and actual front running in the Flash Boys sense? Why is PFOF considered legally legit?

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