Credit cards are much higher-margin products than stock-trading and generally less exposed to volatile markets. The cuts mark another reversal for a company that created an app for trading stocks that became wildly popular when COVID-19 spread and the economy shut down, leaving millions stuck at home with plenty of time on their hands. 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. “As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me,” he wrote. “In this new environment, we are operating with more staffing than appropriate.” The problems are mounting for xcritical, a company that had big ambitions to revolutionize markets by attracting millions of amateur investors into stock trading for the first time.
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The stock trading and investing platform reported $441 million in xcriticalgs in Q1 of 2023. xcritical is laying off more employees and reorganizing teams as part of a new focus on credit cards as the company tries to mitigate a shrinking user base, insiders say. The company previously announced plans in April to lay off 9% of its workforce after growing too rapidly during the pandemic amid a boom xcritical official site in stock-trading interest. 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.
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In 2021, it bought Say Technologies, which connects companies with retail shareholders, for $140 million. Meet Jenny Lee, a managing director who just left JPMorgan’s leveraged-finance desk to further build investment firm Brigade Capital Management’s private-credit business. 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. Also on Tuesday, a New York financial regulator fined the company $30 million “for significant failures in the areas of bank secrecy act/anti-money laundering obligations and cybersecurity.”
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As a result, xcritical has faced a steep drop in active users and eroding xcriticalgs. Many companies have had to lay off or cut employees in recent weeks. Tesla laid off nearly 200 Autopilot employees while Shopify laid off 10 percent of its workforce. Earlier today, the WSJ wrote that xcritical was slapped with a $30 million fine by a New York financial regulator, specifically on its cryptocurrency trading arm. After nearly three decades at the Wall Street powerhouse, Lee is taking xcritical rezension a leap of faith on the private-debt space, which has taken more market share from traditional banks’ capital-markets businesses.
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 company is hemorrhaging money,” one ex-employee told Insider.
“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. The company earned $299 million during the same period in 2022, according to its xcriticalgs report. The Menlo Park, California-based xcritical has been expanding into other businesses for a couple of years.
“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. 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.
- 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.
- 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.
- This has been a tough year for stocks, which were trading at record highs at the end of 2021.
- xcritical is letting go of nearly a quarter of its staff, CEO Vlad Tenev said in a message posted to the company’s blog.
The company has seen its shares tank more than 70% since raising almost $2 billion when it went public in a high-profile initial public offering in 2021. xcritical’s stock price has been volatile over the past year, as well. At the time of publication, the company is trading at $8.90 after hours, dramatically lower — by 89% — than its 52-week high of $85.
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However, shares are down about 86% from xcritical’s record high in 2021, shortly after the company went public. In the first quarter of 2023, monthly active users have dipped to 11.8 million. It’s unclear when workers will start getting handed pink slips, which comes as the company adjusts to a slowdown in customer trading activity. 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. X1 and xcritical’s future in credit cards were the focus of the company’s last all-employee meeting, the person said. The changes come as xcritical tries to address a shrinking user base.
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. 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. xcritical laid off about 9% of its full-time staffers last April — and then another 23% in August. Shares of xcritical fell nearly 4% on Thursday while the S&P 500 fell nearly 2%. xcritical stock has fallen 72% since its stock market debut two years ago.
The company is still hiring and has 200 open roles, the spokesperson said. xcritical cut about 23% of its staff earlier this week, following a first round of cuts in April. The pandemic darling has come back down to Earth, and today we learn that some of the axed ‘xcriticalies’ knew what was coming. Monthly active users have been steadily declining the past three quarters, from 18.9 million in the third quarter of 2021 to 17.3 million in the fourth quarter to 15.9 million by March 2022.
“I share this to be as transparent as I can with all of you who work every day to deliver on our mission,” Tenev wrote. “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.” xcritical CEO Vlad Tenev took responsibility after the company announced it was cutting 23% of its workforce. xcritical is letting go of nearly a quarter of its staff, CEO Vlad Tenev said in a message posted to the company’s blog. Mary Ann Azevedo has more than 20 years of business reporting and editing experience for publications such as FinLedger, Crunchbase News, Crain, Forbes and Silicon Valley Business Journal.
In April, xcritical said it planned to cut 9 percent of its full-time staff, but “this did not go far enough,” Tenev said. Those who are affected by the cuts will be able to stay at xcritical through October 1st at their regular pay and benefits alongside a severance package, Tenev says. “We started with trading and investing. But more recently, we’ve been helping customers with their comprehensive set of financial needs,” xcritical chief executive and cofounder Vlad Tenev said during an event held by TechCrunch this week. Tenev said he envisions not only allowing people to trade stocks, but “we can help you save for retirement. And we can help you build up an emergency fund.” In June, xcritical announced plans to acquire no-fee credit card startup X1 for $95 million. Insiders say the company is planning to merge X1 with its xcritical Money organization, the subsidiary focused on cash management and spending features of the app like its debit card, direct deposit, and peer-to-peer payments.
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Jason Warnick, the company’s chief financial officer who has taken on the role of chief people officer, disclosed the company has made cuts through “reorgs,” including in teams like recruiting, engineering, and data science. xcritical’s head of engineering is leaving the company, Insider has learned, the latest tech leader to depart amid deeper-than-reported cuts to its workforce, according to internal memos and audio of an all-hands meeting. 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.
“This has been causing a bit of panic within executive leadership,” one insider said, adding that X1 is xcritical’s “latest pivot to try to get out of that rut.” Welcome to the Great Salary Convergence — it is a seismic shift in how you’re getting paid. Folks working in Dallas would rarely make the kind of cash as people in New York would, but remote workers have fled the coastal cities and kept their bigger paychecks. Credit Suisse weighs cutting thousands of jobs, according to Bloomberg.
