Robinhood cuts 10% of staff in restructuring push
The trading app will eliminate 290 roles and expects $28 million in second-quarter restructuring costs, Reuters reported.
By James Whitfield · Staff Writer
3 min read
Robinhood plans to cut 10% of its workforce, equal to 290 employees, as the online brokerage reshapes its operations, Reuters reported Tuesday. The move matters because it comes as the company says trading activity has strengthened, even as it tries to reduce costs and become less dependent on swings in market sentiment.
The Menlo Park, California-based company has about 2,900 employees, according to Reuters. Along with the job cuts, Robinhood will also close some open positions that had not yet been filled.
Chief Executive Vlad Tenev told employees in a note shared on X that the company needed a flatter structure. “We cannot default to operating as a heavily-layered organization. We must be a lean, hyper-focused team,” he wrote.
Tenev also said in the post that “Robinhood’s business has never been stronger.” The AFL-CIO’s CEO pay tracker said Tenev earned seven times the average employee’s pay in 2024, Reuters reported.
Costs and market reaction
Robinhood expects the restructuring to cost $28 million in the second quarter, according to Reuters. Its shares were down 2.9% in midday trading after the announcement.
The company said it was acting “from a position of business strength,” Reuters reported. Robinhood cited record June month-to-date average daily trading volumes across equities, options and prediction markets.
The cuts follow a mixed stretch for the trading platform. In April, Robinhood missed Wall Street expectations for first-quarter profit after volatility tied to cryptocurrency trading weighed on activity, according to Reuters.
Market conditions have improved since then, Reuters reported, helped by reduced tensions in the Middle East and gains in equity markets that have supported retail trading. Individual investors often pull back when volatility rises.
AI not seen as main cause
Citizens JMP Securities analyst Devin Ryan wrote in a note that artificial intelligence-driven efficiency did not appear to be the main reason for the job cuts, Reuters reported. Ryan said Robinhood had already been using AI aggressively across the company.
Ryan said technology is allowing Robinhood to run with a flatter and more productive structure, according to Reuters. That assessment aligns with Tenev’s message that the company wants fewer layers as it allocates resources.
Robinhood has spent recent years expanding beyond its roots as a trading app, Reuters reported. The company has moved toward a broader financial services model to limit its exposure to trading activity, which can rise or fall quickly with investor confidence.
The restructuring shows Robinhood is still adjusting its cost base after the retail trading boom that made the company a household name. Reuters reported that management is pairing job cuts with claims of stronger current trading demand, a balance investors weighed as the stock slipped Tuesday.
This story draws on original reporting from Al Jazeera.