Robinhood, the app that popularized free one-click stock and crypto trading, revealed on Tuesday that it would lay off roughly 340 full-time employees, or around 9% of the 3,800 workforce.

The move, according to Robinhood CEO Vlad Tenev, is in response to a decline in active users following a period of rapid growth early in the COVID-19 pandemic, which sent the company’s price tumbling about 72 percent in six months.

Shares of the U.S. consumer investing and trading service company dropped 5% in extended trading Tuesday after the company announced the layoffs in a blog post.

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Robinhood Market Value Down

Robinhood, which went public in July at a price of $38, saw its value peak at $85 per share before falling to a meager $10 per share.

In a blog post, Tenev said:

“We determined that making these employee cutbacks is the best course of action for improving efficiency, increasing our velocity, and ensuring that we remain responsive to our clients’ evolving needs.”

Tenev said the company will accelerate its product momentum for the remainder of the year and will offer significant new products spanning brokerage, cryptocurrency, spending, and saving.

The CEO stated that Robinhood was “financially sound,” with $6 billion in cash on hand.

Robinhood has long been criticized for its commission-free one-click trading, particularly when it comes to riskier products such as options.

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The Silicon Valley startup grew rapidly and upset rivals such as E-Trade and other brokers with its simplicity of use and lack of fees, but opponents questioned if it fostered an unhealthy practice, particularly among young and inexperienced individual investors.

Between 2019 and 2021, Robinhood increased its employment base by roughly thrice, from 700 to over 3,800.

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Redundant Posts

However, Tenev noted that the growing personnel generated redundant positions and added an unneeded layer of complexity, precipitating the present layoffs.

“While the choice to take this action was not easy, it is a calculated move to ensure we can continue delivering on our strategic objectives and advancing our mission to democratize finance,” Tenev explained.

On Thursday, Robinhood is slated to report its first-quarter earnings after the market’s close. The blog post made no mention of those financial findings, save to state that the company currently has more than $6 billion in cash on hand.

Meanwhile, based on the company’s financial report, Robinhood’s active user base has decreased from 18.8 million in the third quarter of last year to 17.2 million in the most recent quarter.