- Robinhood will cut 10% of its workforce, impacting nearly 290 employees
- CEO Vlad Tenev said layoffs aim to keep the company lean and efficient
- The core business is performing well with record daily trading volumes
US trading platform Robinhood on Tuesday (Jun 16) announced it will slash 10 per cent of its workforce, affecting nearly 290 employees, to keep the brokerage firm 'lean' and maximise 'talent density'. Despite the layoffs, Chief Executive Officer Vlad Tenev claimed that the company was performing exceptionally well, with its core business achieving unprecedented daily trading volumes.
In a memo to the employees, Tenev explained that the layoff decision was taken to ensure that the company is not weighed down by a 'heavily-layered' organisational setup.
"I want to be transparent about why this is happening now. Robinhood's business has never been stronger. But to achieve the massive scale of our mission, we cannot default to operating as a heavily-layered organisation," Tenev wrote in the memo accessed by Business Insider.
Tenev said the decision was made preemptively to keep the organisation healthy and maximise the efficiency to achieve the long-term goals, adding that future hiring would be done 'strategically'.
"Because our financial position is strong, we are making this change proactively. The goal is to maximise our talent density and ensure that our culture is defined by an absolute elite performance bar and a superlative commitment to our customers," he said.
"We will also continue hiring strategically, investing heavily in top-tier talent, and utilising frontier technologies to push our execution even further."
Robinhood Shares
Robinhood said it expects to incur about $28 million in charges tied to the cuts, consisting of severance and benefits costs, as well as fees tied to share-based compensation.
Robinhood shares dropped in late April due to reported rising expenses and slowing trading revenue, notably from a steep decline in client activity in cryptocurrencies. The stock has since rebounded but remains down approximately 15 per cent this year.
