Robinhood said it will eliminate about 290 jobs, equal to roughly 10% of its full-time workforce, and expects to record about $28 million in restructuring charges. The online brokerage said the move is meant to simplify its management structure, reduce organizational layers, and close the small number of roles that are still open.
CEO Vlad Tenev told employees in a message later shared on X that the company is making the change from a position of strength. He wrote that Robinhood’s business “has never been stronger,” but said the company could not keep operating with a heavily layered structure and needed to stay focused. Tenev also said Robinhood would continue hiring strategically while investing in top-tier talent and frontier technologies.
Most of the cost will come from severance and benefits
A regulatory filing cited by the company said Robinhood had about 2,900 full-time employees as of Dec. 31. Management expects around $20 million in severance and employee benefit costs, plus roughly $8 million in share-based compensation expense. The company said those charges are expected to be recognized in the second quarter.
Markets reacted favorably at first. Robinhood shares rose nearly 3% in premarket trading after the announcement, though the stock was still down 13% for the year through Monday’s close.
Record June trading activity follows a weak crypto quarter
At the same time it announced the layoffs, Robinhood pointed to stronger activity across the platform. The company said month-to-date average daily volumes in June had reached record levels in equities, options, and prediction markets. That marks a sharp contrast with the first part of the year.
In April, Robinhood’s first-quarter earnings missed Wall Street profit expectations as weaker crypto trading weighed on results. Revenue from cryptocurrency trading fell 47% year over year to $134 million in the January-to-March period. Transaction-based revenue came in at $623 million, below analyst estimates, according to the earnings report.
Analysts had already flagged crypto as a major pressure point. Morningstar described the segment that way directly, while Raymond James said trading volumes had become uneven and showed signs of retail investor fatigue. KBW analysts also noted that competition was getting tougher as both digital asset exchanges and traditional financial firms expanded their offerings.
Robinhood keeps pushing beyond core brokerage revenue
The company said market conditions have improved in recent months, citing easing tensions in the Middle East and strength in equity markets as support for retail trading activity. Robinhood has also been trying to reduce its dependence on trading-volume swings by broadening its business mix. Retirement accounts, wealth management services, and credit card products are part of that effort.
Earlier this month, Robinhood expanded in Canada through its acquisition of Canadian crypto platform WonderFi and launched stock and options trading services there. The step brought its investing products to Canadian users for the first time and added to its push beyond its core U.S. retail trading business.