Trading platform Robinhood to cut 10% of workforce in restructuring
By Manya Saini
June 16 (Reuters) - Robinhood said on Tuesday it would cut 10% of its full-time workforce, or about 290 roles, as the trading platform seeks to operate more efficiently by flattening organizational layers.
The move comes as companies across sectors continue to scrutinize headcount and management structures, with many executives arguing that leaner organizations 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 organization. We must be a lean, hyper-focused team," he added.
Shares of Robinhood were last down 2.5% in afternoon trading, reversing premarket gains.
The company expects to incur restructuring charges of about $28 million that will be recognized in the second quarter and said it will close a small number of open roles. Robinhood will "continue hiring strategically" and investing in top-tier talent, Tenev said.
Menlo Park, California-based Robinhood had about 2,900 full-time employees as of December 31, a regulatory filing showed.
AI-driven efficiency was not the main driver of the reduction, as Robinhood has long been aggressively leveraging artificial intelligence across the organization, Citizens JMP Securities analyst Devin Ryan wrote in a note.
"We do see a broader dynamic where technology is enabling the company to operate with a flatter, more productive structure."
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 across equities, options and prediction markets.
In April, Robinhood missed expectations for first-quarter profit as crypto-driven volatility weighed on trading activity. 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.
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.
(Reporting by Manya Saini in Bengaluru; Editing by Tasim Zahid)