Robinhood stock climbs as firm announces 10% reduction in workforce

Robinhood Markets said on Tuesday it will reduce its full-time workforce by roughly 10%, affecting about 290 employees, as part of a restructuring effort that comes despite record trading activity across several of its businesses.

The online trading platform also said it would eliminate a small number of remaining open positions.

Shares of Robinhood HOOD rose about 2.5% in premarket trading following the announcement.

In a regulatory filing, the company said it expects to incur approximately $20 million in restructuring charges related to employee severance and benefits, along with roughly $8 million in share-based compensation expenses.

The charges are expected to be recognized during the second quarter.

"The company is taking this action from a position of business strength, including June month-to-date average daily trading volumes at record levels across equities, options, and prediction markets," Robinhood said.

Robinhood had approximately 2,900 full-time employees at the end of December, according to its latest filings with the US Securities and Exchange Commission.

Strong trading activity supports outlook

The workforce reduction comes as Robinhood continues to benefit from elevated trading activity and growing customer engagement.

The company reported first-quarter results in April, showing modest profit growth and a 15% increase in revenue, driven by strong activity in options trading, subscription products, and prediction markets.

Management also indicated at the time that the second quarter had begun strongly, supported by robust trading volumes across its platform.

The latest filing reinforced that message, with Robinhood highlighting record average trading activity across equities, options, and prediction markets during June.

The company has increasingly positioned itself as a broader financial platform rather than simply a commission-free stock trading app, expanding into retirement products, subscriptions, and event-based trading.

Prediction markets become major growth driver

One area attracting particular attention from analysts is Robinhood's rapidly growing prediction markets business.

Analysts at Bernstein said the company could see significant benefits from a surge in activity tied to the FIFA World Cup.

According to the research firm, daily prediction market volumes rose from $2.2 billion on June 11 to $4.8 billion on June 12, when the United States played Paraguay.

Bernstein noted that those figures already exceed the approximately $1.4 billion traded during last season's Super Bowl.

In a note to clients, analysts led by Gautam Chhugani said prediction markets have become Robinhood's fastest-growing revenue-generating product since launch.

The brokerage forecasts revenue from prediction markets will rise from $150 million in 2025 to $586 million in 2026, representing a growth of 286% year over year.

If realized, prediction markets would account for roughly 17% of Robinhood's transaction-based revenue and about 10% of the overall company revenue next year.

Part of a broader technology sector trend

Robinhood's workforce reduction also reflects a broader trend across the technology sector.

Companies including Snap, Block, Atlassian, and Pinterest have announced significant layoffs this year as firms seek to improve efficiency while investing in new technologies.

According to data from Challenger, Gray & Christmas, technology companies announced 38,242 job cuts in May alone.

Year-to-date reductions have reached 123,653 positions, a 66% increase from the same period last year.

At the same time, technology remains the leading source of hiring plans, with employers announcing more than 11,000 planned hires in May, underscoring the sector's continued growth even as companies reshape their workforces.