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Robinhood’s note on 10% layoffs shows blaming AI isn’t cutting it
Robinhood CEO Vlad Tenev announced the company is laying off 10% of its full-time employees—approximately 290 people—without attributing the cuts to artificial intelligence, a departure from many tech peers who have cited AI restructuring for job reductions. Tenev’s note to employees and the company’s regulatory filing framed the move as a restructuring exercise, though he mentioned using “frontier technologies to push our execution even further,” deliberately avoiding the term AI. This reflects declining sentiment toward AI, even as some tech executives profit immensely. Tenev added that companies must operate with smaller teams and “flatter organizational structures,” stating: “We cannot default to operating as a heavily-layered organization. We must be a lean, hyper-focused team.” Similar language has appeared in layoff announcements at Amazon, Block, Coinbase, GitLab, and Intuit, indicating that large teams, bureaucracy, and siloed departments are now seen as undesirable, especially as AI tools promise productivity gains. Some analysts suggest this tacitly acknowledges that tech companies over-hired after the COVID-19 pandemic and are now scaling back as expenses—particularly those tied to massive AI usage—accumulate. Despite the layoffs, many of these companies are performing well. Tech stocks have surged on record revenues, improved profit margins (GitLab reported 88% gross margin last month), rising cloud demand, and expectations of high returns from data center investments. Robinhood itself posted a 15% improvement in first-quarter revenue in April and expects stronger second-quarter results due to rising prediction market fees, subscription revenue, and strong equity and options trading as markets stabilize. The company also said it is closing “a small number” of open roles and will incur approximately $28 million in costs related to the cuts.