Robinhood is laying off nearly 300 people to keep a 'high performance culture'

By Tomi Kilgore

Robinhood's stock rallies toward a fifth straight gain, as stocks and crypto trading platform says job cuts come from a position of strength

The company said the cuts would keep the company "lean and disciplined."

Shares of Robinhood Markets rose Tuesday, as investors cheered the stock and crypto trading platform's disclosure of job cuts that would affect nearly 300 employees.

The company (HOOD) stated in a filing with the Securities and Exchange Commission that the workforce reduction, which involves about 10% of its full-time employees, was part of its efforts to "maintain a high performance culture." The company said in its latest annual report that it had about 2,900 full-time employees.

In addition to the layoffs, the company said it would close a "small number" of open job positions.

The company said the cuts would also help speed up time-to-market for new products, while helping to keep the company "lean and disciplined."

Robinhood's stock climbed 1.7% in recent morning trading, to put it on track for the highest close since the end of January. The stock has run up 19.1% amid a five-day win streak. Cryptocurrencies have bounced sharply over that same time, with bitcoin (BTCUSD) rising 7.3%.

Read: Bitcoin bulls are still around. These charts show they just moved on to hotter markets.

The job cuts come a little over a month after Robinhood's rival, cryptocurrency exchange Coinbase Global (COIN), said it planned to cut its workforce by 14%, and replace at least some of them with artificial intelligence.

Robinhood didn't mention artificial intelligence as part of its motivation to cut jobs. The company said it was making the move from a "position of strength," as trading volumes so far in June have reached record levels. Robinhood was one of the five brokerages that provided some of its customers with SpaceX shares SPCX at the initial public offering price of $135; those shares were recently trading around $210 ahead of Tuesday's open.

The company expects restructuring charges of about $20 million related to employee severance and benefits, as well as charges of about $8 million for share-based compensation.

While Robinhood said the job cuts were one way to keep employees performing at a high level, the company said in its latest quarter filing that workforce reorganizations could continue to hurt the company's reputation among job seekers and "demoralize our remaining employees," which could in turn reduce productivity and lead to the cancellation or delay in completing new product developments.

"For example, in the periods immediately following our past restructurings, we experienced higher rates of voluntary employee attrition and declines in reported employee job satisfaction," the company stated.

Citizens analyst Devin Ryan said given that the reported compensation and benefits expenses for the first quarter that annualized would be about $1.2 billion, the job cuts would save the company about $120 million a year, with some additional related efficiencies bumping up that figure.

Ryan reiterated his bullish outlook on Robinhood's stock, with his $155 price target implying 55% upside from current levels.

Robinhood had announced a layoff of around 7% of its employees - about 150 people - in June 2023, as the company looked to adjust its workforce to trading volumes and better align team structures. And in August 2022, the company announced plans to cut 23% of its workforce, about four months after announcing plans to let go 9% of its staff.

Robinhood's stock has dropped 11.8% in 2026, while Coinbase shares have lost 23.5%. The S&P 500 index SPX has gained 10.5% so far this year.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

06-16-26 1001ET