Cboe to cut about 20% workforce

Exchange operators make money when people need to trade risk fast. That is the backdrop here. Volatility jumped in the first quarter, options volumes surged, and Cboe turned that into record revenue and earnings. But instead of simply celebrating the quarter, the company also said on May 1 it will cut about 20% of its global workforce and reorganize around the businesses it thinks matter most. ### Why is Cboe doing layoffs after a strong quarter? Because this is not a distress story. It is a focus story. Cboe framed the move as a strategic realignment meant to put more capital and attention behind the businesses that drive earnings, while stripping out work it no longer sees as core. The company said the restructuring should produce roughly $20 million to $25 million of savings in 2026. ### How strong was the quarter? Pretty strong. First-quarter net revenue hit a record $728.9 million, up 29% from a year earlier, and diluted EPS reached $3.66, also a record for the quarter. Adjusted diluted EPS came in at $3.70, ahead of analyst expectations cited in market coverage. Cboe also lowered its 2026 adjusted operating expense guidance to $838 million to $853 million, down from $864 million to $879 million. ### What actually drove the jump? Options. Cboe’s options segment revenue rose 33% to $467.6 million, and average daily volume in index options reached 6.1 million contracts, up from 4.8 million a year earlier. Europe and Asia-Pacific revenue also climbed 32% to $84.9 million. Basically, when investors get nervous, they hedge more, and Cboe owns a lot of the plumbing for that trade. ### Why cut people if volumes are booming? Because management seems to think the boom is the moment to reshape the company, not wait for a weaker tape later. That is a familiar exchange-business move — use a strong trading environment to pay for restructuring, tighten costs, and come out with a cleaner margin profile. Cboe shares rose about 4% in premarket trading after the results and layoff announcement, which suggests investors liked that logic. ### What else is Cboe changing right now? It is also trying to expand one of its flagship products. A filing published May 1 would let Cboe list A.M.-settled S&P 500 index options that expire on any weekday, except the standard third-Friday monthly expiration and dates that overlap with end-of-month expirations. That matters because SPX options are one of Cboe’s crown jewels, and adding more expiration points can create more trading opportunities — and more fee revenue. ### And what is the SEC looking at? A separate Cboe BZX proposal would let the exchange delay its opening auction under certain market conditions to improve price discovery. The SEC has now opened proceedings to decide whether to approve or disapprove that change, which means regulators want a closer look before letting it move ahead. That is not the same as rejection, but it does show that Cboe’s market-structure tweaks are getting real scrutiny. ### So what is the real story? Cboe is acting like a company that thinks its core franchises are strong enough to support sharper bets. The layoffs are painful, but they are paired with record earnings, higher growth targets, lower expense guidance, and product expansion plans. In plain English — Cboe is using a hot options market to get leaner and double down on the businesses it believes can keep compounding. ### Bottom line? This is what a profitable reset looks like. Cboe is not shrinking because business is weak. It is shrinking parts of itself while the business is strong, so it can push harder on the options engine that just delivered one of its best quarters yet.