Jun 16 (Reuters) – Robinhood announced on Tuesday that it would cut 10% of its full-time workforce, or around 290 positions, as the trading platform seeks to operate more efficiently by simplifying organizational layers.
The decision comes as companies across industries continue to scrutinize their staffing and management structures, with many executives arguing that leaner organizations make decisions more quickly and allocate resources more effectively.
“Robinhood’s business has never been stronger,” Chief Executive Vlad Tenev said in a note to employees shared on social media platform
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Robinhood shares rose nearly 2.5% in premarket trading. Shares are down 13% year to date as of Monday’s close.
The company expects to incur restructuring expenses of about $20 million for employee severance and benefits, as well as about $8 million in stock-based compensation expenses.
It expects to recognize costs in the second quarter and will close the small number of positions still open. The Menlo Park, California-based company had about 2,900 full-time employees as of Dec. 31, according to a regulatory filing.
Robinhood stated that it is taking this action “from a position of business strength,” citing average daily trading volumes accumulated in June, which reached record levels in the stock, options and forecast markets.
In April, Robinhood fell short of first-quarter profit expectationsas cryptocurrency-driven market volatilityweighed on trading activity. Since then, market conditions have improved, with easing tensions in the Middle East and rising equity markets supporting retail trading activity.
