Robinhood's Restructuring Cost Peaks after the Latest Update
Robinhood, a trading brokerage announced the update of its restructuring plans a few months after it laid off 23% of its workforce.
The brokerage said in an SEC filing, that with a smaller workforce, it was prompted to review the portfolio of real estate it owns. As part of the August 2022 Restructuring, Robinhood decided to close all or part of five more offices on September 30, 2022, four of which are recent leases that have not yet been occupied. Due to these efforts, no employees are being fired.
Robinhood anticipates an extra $45 million in restructuring-related charges as a result of these new office closures (substantially all of which will be incurred in the third quarter of 2022). The business additionally anticipates that this choice will result in run-rate savings of an additional $4 million per quarter, beginning in the fourth quarter of 2022 and continuing through the first quarter of 2024, as well as savings of lower amounts beyond that.
The range of $45 million to $60 million that Robinhood had initially projected for its restructuring charge is now being revised as a result of these steps. According to the updated estimate, Robinhood will incur total restructuring-related costs of between $90 million and $105 million in connection with the August 2022 Restructuring, the majority of which Robinhood anticipates will be incurred in the third quarter of 2022 (excluding the impact of share-based compensation).
A few days ago, Fazzaco learned that the brokerage has had its self-custody web-3 wallet beta go live.
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