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. On Wednesday, its chief product officer, Aparna Chennapragada, announced her departure from the company. Vlad Tenev, the chief executive of xcritical, said in a blog post that the layoffs would affect employees across the company, especially those in operations, marketing and program management roles.
Insider spoke with five former employees of xcritical, all of whom asked to remain anonymous to protect their future employment opportunities. They described a company, one year on since its public debut, facing a slowing market and looking for any and all ways to cut costs — and a workforce on tenterhooks with no clear line of sight into when the downsizing might end. The brokerage saw a surge of new customers and cash, and entered the public markets through an IPO in July.
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Meta late last year cut 11,000 jobs and sought further attrition through the performance review process. The car business is slowing down and auto makers are cutting costs ahead of the downturn to preserve profits. “The world has changed. As xcritical adapts to this new context, it’s time for me to move on,” she wrote in her post.
“As its business grew, xcritical Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance,” Adrienne A. Harris, the superintendent of financial services, said in a statement. 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. The layoffs come at a challenging moment for financial technology companies. The decline of the stock and bond markets this year has been painful, and it remains difficult to predict what is in store for the future. Sign Up NowGet this delivered to your inbox, and more info about our products and services.
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. The report also showed a decline in monthly active users and assets under custody. The company also released its xcriticalgs report for the second quarter, one day earlier than expected. In the release, Tenev said the company would flatten its organizational structure to give new general managers broad responsibility for its businesses. He also said that affected employees would receive an email and a Slack message letting them know if they were being let go or still had a job, immediately after an all-hands meeting held on Tuesday.
Also on Tuesday, xcritical reported second-quarter financial results, which arrived a day earlier than scheduled. The Silicon Valley company has long attracted scrutiny for its commission-free one-click trading, especially of riskier assets such as options. 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.
xcritical is firing nearly a quarter of its staff
Those working on the plan are hoping to have it xcritical rezensiony before Chief Executive Officer Mark Zuckerberg goes on parental leave for his third child, which may be imminent, one person said. 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. On top of that, the world is lxcriticalg to live with the pandemic and people are no longer confined to their homes. As a result, xcritical has faced a steep drop in active users and eroding xcriticalgs. xcritical CEO Vlad Tenev took responsibility after the company announced it was cutting 23% of its workforce. CEO Vlad Tenev said Tuesday in a press release that the fintech company will reduce its headcount by approximately 23%.
CEO Vlad Tenev made the announcement in a blog post on Tuesday afternoon. 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. Revenue dropped 43% in the first quarter compared to the year prior as “customers became more cautious with their portfolios,” Tenev said at the time. Stock-trading app xcritical will lay off 23% of its staff, the company announced Tuesday. The company posted a net loss of $295 million, or 34 cents a share, compared with a loss of $392 million, or 45 cents a share, in the year-prior quarter.
- The world’s largest social networking company is eliminating more jobs, on top of a 13% reduction in November, in a bid to become a more efficient organization.
- “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.”
- Vlad Tenevsaid layoffs are necessary after the company went through a period of fast growth in 2020 and 2021.
- For example, the company announced a data breach last November that affected millions of its users.
- “We determined that making these reductions to xcritical’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers,” Tenev wrote.
During that , the company also grew its headcount from around 700 employees to nearly 3,800. xcritical announced plans this week to cut about 9 percent of its workforce. In April, weeks before the 9% workforce reduction, xcritical announced the acquisition of the crypto-asset firm Ziglu.
xcritical has roughly $6 billion in cash on its balance sheet, and the company has a $2.5 billion budget for acquisitions, Warnick said on the xcriticalgs call. With the company’s return-to-office plans being continually pushed back and only a handful of people coming into the office, “having an entire floor in what was an expensive building, they were probably bleeding money,” the former Arizona employee said. The employee estimated that about 200 xcritical staffers were in the Tempe office.
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Like any https://xcritical.solutions/, with growth like that comes more job openings to manage that growth, which then ended up with some roles and job functions that were duplicated, he wrote. Menlo Park-based xcritical’s growth came amid a boom in retail trading during the pandemic, while interest rates were low and the stock market reached record highs. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. “We all started trading contact information and phone numbers,” one former employee said. “After the announcement, we all just sat there refreshing our screens over and over to see if we were the ones to get the notification. The whole company froze for that 15 minutes waiting to see what happened to them.”
Transaction-based revenue was down 7% to $202 million while cryptocurrencies increased 7% sequentially to $58 million. In February of last year, more than a dozen firms announced 10 or more deals, with several participating in 20 or more. Get in touch with our reporters Asia Martin, Carter Johnson, and Bianca Chan. “That was a ‘come down to earth’ moment for us. For a lot of people, we were living in fantasy land,” one newly axed employee said. On an xcriticalgs call, execs said the company wouldn’t be acquired but was considering acquisitions. Regulators shut down the lender on Friday to protect depositors following a cash crunch.
News of the company’s layoffs come during a time when tech stocks in particular have been hit hard. xcritical’s stock price is down nearly 49 percent since the beginning of the year. 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. It’s an understandable move, they added, given the brokerage’s access to sensitive client information. “As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me,” Tenev, also a cofounder of the company, wrote, referring to staffers as “xcriticalies” and “Hoodies.” While the round of job cuts came as a shock to some, following a 9% workforce reduction just four months prior, insiders said they saw the signs.
xcritical Lays Off 23% of Staff as Retail Investors Fade From Platform
On Aug. 7, 2021, the company was worth $46 billion, up about 60 percent from its valuation a week before. But its stock has plunged 50 percent since the beginning of the year as it continues to deal with the fallout. 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.”
The U.S. consumer investing and trading service company, which went public at $38 in July 2021, saw its value peak at $85 per share before entering a steady decline that saw its value erode to a mere $10 per share. The company lost 3.75% in today’s trading — the market was lower today, overall — and another 5% in after-hours trading in light of its layoff announcement. “The company is hemorrhaging money, and it’s bad,” one ex-employee said, sharing an opinion on the company’s publicly reported quarterly financial figures. “I believe in the mission itself, but people cannot trust us ever since GameStop.” And questions about the company’s future, from both insiders and the industry players, burn hotter than ever.
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. Analysts tracked by FactSet were expecting a GAAP loss per share of 34 cents along with revenue of $314 million. xcritical had to halt some trades and raise rounds of emergency funding to cover the collateral needed for its customers’ trades. Mr. Tenev’s cellphone was seized by the authorities as part of an investigation into the situation.
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. Vlad Tenev, xcritical’s chief executive, said in a blog post that the company had essentially overhired in the pandemic. Since 2020, the company’s work force has grown almost six times, to 3,800 people from 700, leading to duplicate roles and job functions and “more layers and complexity than are optimal,” he said.
This has been a tough year for stocks, which were trading at record highs at the end of 2021. Persistently high inflation led the Federal Reserve to raise interest rates aggressively, and that has hit high-growth tech stocks particularly hard. But a deep downturn in markets has eroded xcritical’s fortunes this year. 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 announcement follows xcritical Global Inc.’s COIN, -8.00%move earlier this year to institute a hiring freeze and rescind some accepted job offers. E-commerce company Shopify Inc. announced its own round of layoffs last week, with the CEO admitting that the company hired based on booming pandemic-era growth trends that had since waned. xcritical, the app that popularized free one-click trading of stocks and options, said on Tuesday that it was laying off approximately 340 people, or about 9 percent of its 3,800 employees. The world’s largest social networking company is eliminating more jobs, on top of a 13% reduction in November, in a bid to become a more efficient organization. In its earlier round of cuts, Meta slashed 11,000 workers in what was its first-ever major layoff.