Robinhood Markets announced on Tuesday that it will reduce its full-time workforce by approximately 10%, affecting about 290 employees, as part of a push to simplify its management structure. The online brokerage also plans to close a small number of remaining open positions.
In a regulatory filing, the company estimated around $20 million in severance and employee benefit costs, plus roughly $8 million in share-based compensation expenses, bringing total restructuring charges to $28 million. These will be recognized during the second quarter. Despite the cuts, management emphasized that the move comes from a position of business strength, with June month-to-date average daily trading volumes reaching record levels across equities, options, and prediction markets.
CEO Vlad Tenev, in a memo posted on X, wrote: “Robinhood’s business has never been stronger,” adding that the company could not remain “a heavily layered organization” and needed to remain focused. “Because our financial position is strong, we are making this change proactively. The goal is to maximize our talent density and ensure that our culture is defined by an absolute elite performance bar.”
Investor reaction was positive, with Robinhood shares climbing nearly 3% in premarket trading. The stock, however, had fallen 13% year-to-date through Monday’s close.
The announcement came months after weaker cryptocurrency trading weighed on Robinhood’s first-quarter results. Crypto revenue fell 47% year-over-year to $134 million, and transaction-based revenue of $623 million missed analyst estimates. Morningstar described the crypto segment as a “particular pressure point,” while Raymond James analysts noted signs of retail investor fatigue. Conditions have since improved, with easing Middle East tensions and equity market strength boosting trading activity.
Analysts are now focusing on Robinhood’s fast-growing prediction markets business. Bernstein said daily volumes surged from $2.2 billion on June 11 to $4.8 billion on June 12, when the U.S. played Paraguay in the FIFA World Cup, surpassing Super Bowl levels. Bernstein forecasts prediction markets revenue will rise from $150 million in 2025 to $586 million in 2026, accounting for roughly 17% of transaction-based revenue and 10% of overall company revenue next year.
The workforce reduction also reflects a broader tech trend. Technology firms announced 38,242 job cuts in May alone, with year-to-date reductions reaching 123,653, a 66% increase from the same period last year, according to Challenger, Gray & Christmas. Robinhood has continued to expand beyond its core brokerage into retirement accounts, wealth management, and credit cards, and recently launched stock and options trading in Canada through its acquisition of crypto platform WonderFi.
