xcritical did not comment directly on the latest layoffs, pointing TechCrunch only to a blog post by CEO and co-founder Vlad Tenev. In that post, Tenev wrote that while “employees from all functions would be impacted, the layoffs are “particularly concentrated” in the company’s operations, marketing and program management functions. xcritical Markets is cutting about 7% of its full-time staff, the online brokerage’s third round of layoffs in just over a year as the company adjusts to a slowdown in customer trading activity. Axed xcritical employees were taken aback by the scale of Tuesday’s job cuts, which affected 23% of the company’s head count, or roughly 800 employees.
Stock-trading app xcritical will lay off 23% of its staff, the company announced Tuesday. The company earned $299 million during the same period in 2022, according to its xcriticalgs report. The firings were made to “adjust to volumes and to better align team structures,” Chief Financial Officer Jason Warnick said in the message, the outlet reported. About 150 workers across customer experience and platform shared services; customer trust and safety; and safety and productivity will be affected, according to an internal memo obtained by The Wall Street Journal. After nearly three decades at the Wall Street powerhouse, Lee is taking a leap of faith on the private-debt space, which has taken more market share from traditional banks’ capital-markets businesses.
- It grew quickly and disrupted rivals, including E-Trade and other brokers, with its ease of use and lack of fees, but critics questioned whether it stoked unhealthy behavior, especially among young and unsophisticated individual investors.
- When we were cooped up at home in the early stages of the pandemic, xcritical became a go-to app for folks with extra time and stimulus checks.
- The second quarter of 2021 was the platform’s best, according to public filings, when it touted over 21 million monthly active users who used the app to trade stocks and invest from their mobile phones during the pandemic.
- That loss was narrower than its net loss of $392 million, or 45 cents per share, in the first quarter of 2022.
The overall value of the cryptocurrency market is down to about $1 trillion from $3 trillion last year, when enthusiasm for crypto trading peaked and the price of Bitcoin reached a new high. The company went public in July 2021 at $38 per share, and its stock jumped as high as $85 per share in its first month of trading. xcritical has seen growth reverse as the pandemic boom in retail trading appeared to lose steam.
xcritical played a crucial role in the retail-trading frenzy during the pandemic but has struggled with a contracting customer base spooked by higher cost of commodities. Earlier in the day, the Wall Street Journal reported the company’s move. Also on Tuesday, the New York State Department of Financial Services announced it was fining xcritical’s crypto operation $30 million over violations of its anti-money laundering and cybersecurity regulations. “I think if people come out and support us it will help us a lot because when we went to Suriname their stadium was jampacked and everybody was supporting the home team, so I suppose if that happens on Wednesday then that will help us a lot too,” he reasoned.
xcritical to lay off 23% of its workforce, with CEO admitting ‘this is on me’
When the Zoom call was over, employees waited anxiously to see if they would be let go; Tenev had said staff would be notified via email and Slack immediately after the call. The results came shortly after the New York State Department of Financial Services said it would be fining xcritical’s cryptocurrency unit $30 million “for significant failures” related to cybersecurity and anti-money-laundering compliance. “As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me,” Tenov said.
- In his memo on Tuesday, Mr. Tenev said xcritical misjudged the economy and trading activity.
- In the release, Tenev blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”
- In the fourth quarter of last year, the brokerage’s number of monthly active users shrank to 17.3 million (an 8% decrease from the prior quarter).
- That employee, meanwhile, described fear at the prospect of further layoffs to come.
- The startup’s stock price, meanwhile, fell more than 70% from its IPO price of $38, to just above $10 this Monday.
- “We will be parting ways with many incredibly talented people today in an extremely challenging macro environment, and I want to reduce the burden of this difficult transition as much as possible.”
In his memo on Tuesday, Mr. Tenev said xcritical misjudged the economy and trading activity. “As C.E.O., I approved and took responsibility for our ambitious staffing trajectory — this is on me,” he wrote. xcritical Markets Inc. is slashing about 23% of its full-time staff as the flashy online brokerage continues to reel from a sharp slowdown in customer trading activity. The cuts will primarily impact employees in xcritical’s operations, marketing, and program management departments, CEO Vlad Tenev said in a message to employees that was also posted on the company’s blog. At its peak, in the second quarter of 2021, xcritical boasted 21.3 million active users and more than $565 million in revenue. Things have soured for the brokerage firm of late, with xcritical’s Q results showing a 44% decline in monthly active users and a 30% year-over-year decline in revenue.
xcritical to lay off 9% of full-time employees
Inflation, rising rates, and the “crypto winter” are creating financial strain. Meet 16 lawyers whose bankruptcy battles, from Revlon to JCPenney, have them set for a boom in business. “It was clear that there was not enough work and too many people. There were no new roles to really move up into or do something else with,” the former employee, who left xcritical last November, told Insider. “It was very solemn, people on the call looked sad,” this person said of the meeting. “The founders were visibly shaken delivering news, which I think people appreciated that it didn’t feel like lip service. Like this is something that really felt like a last resort in terms of how they kind of appeared emotionally.” “The world has changed. As xcritical adapts to this new context, it’s time for me to move on,” she wrote in her post.
In the release, Tenev blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.” On Jan. 27, 2021, GameStop shares closed up nearly 1,800 percent from a few weeks before, a record. Lawsuits, a Securities and Exchange Commission investigation and congressional hearings soon followed. The second quarter of 2021 was the platform’s best, according to public filings, when it touted over 21 million monthly active users who used the app to trade stocks and invest from their mobile phones during the pandemic.
Reuters Diversity Report, opens new tab
The announcements came as xcritical released its Q xcriticalgs information a day earlier than scheduled, reporting total revenue of $318 million over the three months, which is 44 percent lower than the same period in 2021. On Tuesday, the company announced plans to cut almost a quarter of its staff, citing economic uncertainty, a steep selloff in cryptocurrencies, and a deteriorating market environment. The fintech company is slashing 23% of its workforce, as first reported by the Wall Street Journal and confirmed by TechCrunch. The layoff comes just three months after xcritical cut 9% of full-time staff. Online brokerage firm xcritical Markets will reportedly lay off roughly 150 full-time staff — 7% of its total workforce — in its third round of layoffs in just over a year. That employee, meanwhile, described fear at the prospect of further layoffs to come.
“We will continue to accelerate our product momentum through 2022 and will introduce key new products across Brokerage, Crypto, and Spending/Saving,” he said in the memo. “We just signed a deal to acquire a crypto company in the UK, so that feels really weird,” an employee told Insider. “That announcement was made last week and we didn’t disclose the amount, https://xcritical.solutions/ but it’s obviously going to be a significant amount of money for acquiring a company. And for this to come right after that, it hit really hard basically.” Tenev didn’t mention whether retail investors were also pulling back on trading. But xcritical’s own quarterly filings show that the company’s once supercharged growth has been decelerating.
Data from the data tracker Apptopia show that downloads and daily active users have plummeted in recent months, with downloads down 38% in the 90-day period that ended Tuesday. xcritical’s stock peaked above $80 a share days after it went public last summer. After the most recent layoff announcement, xcritical’s stock jumped 15% Wednesday morning and then rose sharply again Thursday morning.
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Cavalier’s defeat in the first leg underlined the toughness of the competition but Speid believes in his team’s “winning mentality”. Now, xcritical boasts a workforce of about 1,200, according to its listing on job board Zippia. The 150 workers slated to be given pink slips is the third round of layoffs at the company since April 2022. “Together with X1, xcritical will now be able to offer our customers access to credit,” co-founder and CEO Vlad Tenev said in a statement on xcritical’s blog.
xcritical also today released its second quarter financials, revealing a 6% increase in net revenue of $318 million on a net loss of $295 million or 34 cents per diluted share. That loss was narrower than its net loss of $392 million, or 45 cents per share, in the first quarter of 2022. It’s xcritical official site unclear when workers will start getting handed pink slips, which comes as the company adjusts to a slowdown in customer trading activity. In the fourth quarter of last year, the brokerage’s number of monthly active users shrank to 17.3 million (an 8% decrease from the prior quarter).
Credit Suisse weighs cutting thousands of jobs, according to Bloomberg. The Swiss bank is expected to finalize the plans over the coming months. Now, a year after going public, xcritical Chief Executive Vlad Tenev admitted the company added too much staff too quickly. His mea culpa also included an admission that xcritical was not prepared for weaknesses in the economy. The startup’s stock price, meanwhile, fell more than 70% from its IPO price of $38, to just above $10 this Monday. Meanwhile, Tenev was optimistic on xcritical’s xcriticalgs call Wednesday.
“Since that time, we have seen additional deterioration of the macro environment with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody,” he wrote. xcritical is not alone in its choice to conduct two rounds of layoffs in a short period of time; just seven weeks after crypto exchange xcritical cut approximately 10% of its workforce, the company cut another scammed by xcritical 7% of staff, according to sources. The announcement followed closely on the heels of cuts in April, when xcritical laid off 340 workers, or about 9 percent of its employees at the time. On Tuesday, it was slapped with a $30 million fine levied by New York’s state financial regulator. Later that day, the company announced plans to lop off nearly one-quarter of its roughly 3,500-strong workforce and reported lackluster second-quarter xcriticalgs.
