Business
Robinhood to Cut 10% of Workforce in Restructuring Move
Robinhood announced its intention to layoff roughly 10% of workers, about 290 employees. According to the business, this restructuring will contribute to a more efficient organisation structure by reassigning reports deeper in management layers and enabling decisions faster. About $28 million in restructuring costs will be incurred, but Robinhood said the decision is based on business strength, with trading volumes hitting record levels in June.
Robinhood is cutting its workforce by 10% or roughly, 290 full-time roles as part of a restructuring to boost efficiency and manage management structures on Tuesday. The company had delivered a strong performance for its business, but Chief Executive Officer Vlad Tenev said it wanted to run as a more lean organisation.
What Happened
Robinhood said it would cut jobs and affect about 290 employees and are part of a wider plan to streamline organisational layers. The company plans to eliminate a small number of remaining open roles as well. Robinhood employed about 2,900 full-time employees as of Dec.
It anticipates incurring roughly $20 million in restructuring charges associated with employee severance and benefits as well as approximately $8 million in share-based compensation expenses in the second quarter.
Why It Is Being Done
The restructuring will be focused on improving the efficiency of the company's operations by stripping out management tiers and creating a leaner organisation, it said.
The business has never been stronger, Tenev wrote in a note to employees, but he said Robinhood could not afford to be such a layered business. The company wants to keep a team that can act with the greatest basis, speed and quality in his words.
What Comes Next
Robinhood said it is taking the action from a position of business strength, citing record average daily trading volumes in June across equities, options and prediction markets.
It's also been diversifying beyond trading services over the last few years to lessen its dependence on market activity. Its expanding product line now features retirement accounts, wealth management solutions and credit cards. Shares of Robinhood rose nearly 2.5% in premarket trading.
Source: Reuters
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