Trading platform Robinhood to cut 10% of workforce in restructuring

[CALIFORNIA] Robinhood said on Tuesday (Jun 16) it would cut 10 per cent of its full-time workforce, or about 290 roles, as the trading platform seeks to operate more efficiently by flattening organisational layers.

The move comes as companies across sectors continue to scrutinise headcount and management structures, with many executives arguing that leaner organisations make decisions faster and deploy resources more effectively.

“Robinhood’s business has never been stronger,” CEO Vlad Tenev said in a note to employees shared on social media platform X. “We cannot default to operating as a heavily layered organisation. We must be a lean, hyper-focused team.”

Shares of Robinhood were up nearly 2.5 per cent in premarket trading. The stock is down 13 per cent for the year until Monday’s close.

The company expects to incur restructuring charges of about US$20 million for employee severance and benefits costs, as well as roughly US$8 million in share-based compensation expenses.

It expects to recognise the charges in the second quarter and will close the small number of remaining open roles.

The Menlo Park, California-based company had about 2,900 full-time employees as at Dec 31, a regulatory filing showed.

Robinhood said it is taking the action “from a position of business strength”, citing June month-to-date average daily trading volumes at record levels in equities, options and prediction markets.

In April, the company missed expectations for first-quarter profit as crypto-driven market volatility weighed on trading activity.

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Market conditions have since improved, with easing Middle East tensions and strong equity markets supporting retail trading activity.

Retail investors, often referred to as mom-and-pop traders, tend to pull back during periods of heightened volatility, as sharp market swings erode confidence and cause trading fatigue.

To reduce its reliance on trading activity, which can fluctuate with market sentiment, Robinhood has expanded into a broader financial-services platform in recent years.

It offers products such as retirement accounts, wealth management services and credit cards. REUTERS