Cboe Cuts 20% of Workforce to Refocus on Options
Cboe Global Markets announces 334 layoffs as CEO Craig Donohue sharpens focus on core U.S. options business. Shares hit record high on restructuring news and Q1 beat.
Cboe Global Markets is going back to basics.
The exchange operator announced Friday it will cut 20% of its global workforce—roughly 334 employees—as part of a strategic realignment focused on its dominant U.S. options business. Shares hit an all-time high on the news.
CEO Craig Donohue, who took the helm last year, is making his mark. The message: Cboe will double down on what works and exit or minimize what doesn't.
The Restructuring
Cboe employed approximately 1,670 people before Friday's announcement. About one in five received layoff notices.
The cuts span geographies and business units, but the strategic logic is clear. Cboe will concentrate resources on:
- U.S. options and volatility products (VIX, SPX options)
- Data and analytics services tied to those products
- Core equities and futures trading
Everything else is on the table for reduction or divestiture.
"Following a thorough strategic review, we've adopted a more rigorous financial and strategic framework," Donohue said. "We're increasing focus and investment in the core businesses that drive our earnings."
The company expects to save $20 million to $25 million in 2026 from the layoffs, with full run-rate savings in 2027.
Options Dominance
The strategic shift makes sense when you look at Cboe's economics.
U.S. options trading has exploded over the past five years. Retail traders discovered options during the pandemic; they never left. Zero-day-to-expiration (0DTE) options—contracts that expire the same day—have become one of the market's fastest-growing products.
Cboe dominates this space. The company handles more than 30% of U.S. options volume and owns the VIX and SPX franchises outright. No competitor comes close.
| Product | Cboe Market Share | Q1 Volume Growth |
|---|---|---|
| SPX Options | ~100% | +28% |
| VIX Options | ~100% | +22% |
| Multi-Listed Options | ~31% | +15% |
| 0DTE Products | ~45% | +34% |
These products generate high-margin revenue that scales efficiently. Adding volume requires minimal additional headcount—the opposite of Cboe's more labor-intensive international and technology ventures.
What's Getting Cut
The layoffs target areas outside core options:
International expansion: Cboe's European equities and derivatives businesses have struggled to gain traction against entrenched competitors like Eurex and ICE. Expect reduced investment here.
Non-core technology: Cboe acquired several technology and data companies in recent years. Some of those acquisitions will be integrated more aggressively; others may be divested.
Corporate functions: General overhead reduction across finance, HR, and administrative roles.
Cboe is also offering a voluntary retirement program to U.S. and Canadian employees aged 55+ with at least five years of tenure. This provides an off-ramp for employees not directly affected by layoffs.
Q1 Results
The restructuring announcement accompanied strong quarterly results.
Revenue rose 11% year-over-year to $524 million. Options segment revenue grew 18%, driven by record SPX and 0DTE volumes. The company raised full-year guidance on the strength of options trading.
Earnings per share of $2.18 beat the $2.04 consensus by nearly 7%.
The combination of a strong quarter, raised guidance, and decisive restructuring sent shares to record highs. Cboe closed up 6.3% at $217.45.
Industry Context
Cboe's restructuring reflects broader themes in exchange economics.
Exchanges are increasingly winner-take-most businesses. The company with the best liquidity attracts more volume, which improves liquidity further. This flywheel effect concentrates market share.
For Cboe, the flywheel works in options. The company invented modern VIX trading and built the deepest SPX options market. Competitors have tried to launch rival products; none have succeeded.
The international story is different. European derivatives markets are fragmented, and Cboe lacks the home-field advantage it enjoys in the U.S. Rather than continue throwing resources at a difficult market, Donohue is cutting losses.
What It Means for Traders
For active traders, Cboe's options focus is good news. More investment in the VIX and SPX franchises means better technology, tighter spreads, and continued product innovation.
The 0DTE boom has been particularly profitable for both Cboe and traders who use the products effectively. Expect Cboe to keep expanding same-day expiration offerings across asset classes.
For Cboe employees outside the options core, the news is obviously worse. The company's strategic clarity comes at a human cost.
Looking Ahead
Donohue's restructuring sets up Cboe for the next phase of options market growth.
The company trades at roughly 20x forward earnings—a premium to peers like ICE and Nasdaq. That premium reflects options market leadership and the high-margin nature of the VIX franchise.
If options volumes continue growing—and market volatility suggests they will—Cboe's focused strategy should pay off. The layoffs are painful, but the direction is clear.