The prediction market operator, crypto exchange, and stock trading app operator Robinhood will dismiss 290 full-time employees as layoffs continue across the wider gambling industry.
In a statement on X, Robinhood CEO Vlad Tenev said the platform was in a strong financial position and said his firm was “making this change proactively.”
”[Robinhood is] flattening our [organizational] structure and reducing our overall team size by 10% of headcount,” said Tenev. ”We cannot default to operating as a heavily-layered organization. We must be a lean, hyper-focused team where every single individual is empowered to make a massive impact.”
The announcement comes less than two weeks after FanDuel, the sportsbook operator, announced plans to cut staff. Sources close to the firm said “a few hundred employees” had been axed in the company’s latest round of layoffs.
Robinhood Layoffs: More Firms to Follow?
Robinhood says the job cuts are part of a restructuring program. The program will cost the firm around $28 million, Reuters reported.
The same news agency quoted Devin Ryan, an analyst at the equity research provider Citizens JMP Securities, as dismissing the notion that Robinhood is looking to replace its staffers with artificial intelligence
”We […] see a broader dynamic where technology is enabling the company to operate with a flatter, more productive structure,” Ryan said.
The firm refuted claims that it has stopped taking on new staffers. It said that it will continue to make strategic hires and invest in top-tier talent.
However, Robinhood also said it would close a “small number” of open job positions.
Are Financial Results to Blame?
Tenev said Robinhood’s business “has never been stronger.” But, despite the optimism, the layoffs announcement appears to have come out of the blue.
As recently as the end of March this year, Robinhood was talking about the importance of attracting and retaining key staff members.
“Attrition and workforce reorganizations and reductions have also and might continue to adversely affect our reputation among job seekers, demoralize our remaining employees, and result in a loss of institutional know-how, reduced productivity, slower customer service response, reduced effectiveness of internal compliance and risk-mitigation programs, and cancellations of or delays in completing new product developments and other strategic projects,” the firm wrote in its most recent quarterly report.
The company said that in the periods immediately following its past restructurings, it “experienced higher rates of voluntary employee attrition and declines in reported employee job satisfaction.”
As the Bitcoin market founders, Robinhood has seen its crypto trading revenues tumble by almost 50% in recent months. This led the firm to miss its Q1 per-share adjusted earnings estimates by $0.01.
Robinhood users currently hold almost $11.6 billion in crypto in smart contracts on the platform, per DeFiLlama data.
In the gambling industry, meanwhile, layoffs continue.
Operators like Underdog, PrizePicks, Penn Entertainment, and DraftKings have laid off employees this year, with the slots developer IGT cutting 700 jobs in March.
