Robinhood closing 5 additional offices in restructuring
The move follows 2 rounds of layoffs at the financial services company
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Robinhood Markets Inc. is partially or completely closing five more of its offices as part of a restructuring program announced in August.
According to an 8-K filing with the U.S. Securities and Exchange Commission, four of the locations are recent leases that have not been occupied. The financial services giant expects the new closures to generate additional run-rate savings of approximately $4 million per quarter between the fourth quarter of 2022 and the first quarter of 2024.
An electronic screen at Nasdaq displays Robinhood in New York's Times Square following the company's IPO, Thursday, July 29, 2021. (AP Photo/Mark Lennihan, File) (AP Photo/Mark Lennihan, File / AP Newsroom)
Prior to the announcement on Friday, Robinhood said it would close two other offices and cut 780 jobs, or approximately 23% of its full-time workforce. The job cuts marked the second round of layoffs after the company laid off about 9% of its full-time employees in April.
Friday's filing said that no additional employees are being terminated as a result of the new office closures.
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Robinhood is forecasting approximately $90 million to $105 million in total restructuring-related charges, excluding the impact of share-based compensation, up from its previously forecasted range of $45 million to $60 million. The company expects to incur the majority of the charges in the third quarter of 2022.
The updated range includes approximately $30 million to $40 million related to employee severance and benefits and approximately $60 million to $65 million related to office closures and contract termination fees, including impairments of approximately $50 million.
It also anticipates a net reversal of share-based compensation of $40 million to $50 million in the third quarter of 2022 as a result of the restructuring.
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The commission-free trading platform played a central role in the retail-trading frenzy during the COVID-19 pandemic, but it has posted declines in revenue in recent months as its customer base has been spooked by rising interest rates and decades-high inflation.
FILE - This Dec. 17, 2020 file photo shows the logo for the Robinhood app on a smartphone in New York. (AP Photo/Patrick Sison) | AP Newsroom
In its second quarter of 2022, Robinhood posted a net loss of $295 million, or 34 cents per diluted share, compared with a net loss of $502 million, or $2.16 per diluted share, in the second quarter of 2021.
Robinhood Markets Inc
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HOOD | ROBINHOOD MARKETS INC. | 37.59 | +1.17 | +3.21% |
Robinhood shares are down approximately 46% year to date.
Reuters contributed to this report