xcritical Is Cutting Jobs and Focusing on Credit Cards to Solve a Shrinking User Base, Insiders Say

The restructuring affected roles in customer experience, platform shared services, customer trust and safety, and safety and productivity. The company experienced an uptick in employees voluntarily leaving and declines in reported employee job satisfaction following the layoffs in 2022. xcritical’s decision to lay off 23% of its workforce was primarily driven by economic pressures and a shift in industry demands. CEO Vlad Tenev admitted that the company had over-hired in 2021, anticipating that the heightened retail engagement would continue into 2022. However, factors such as high inflation and a broad crypto market crash led to reduced customer trading activity and assets under custody, prompting the need for internal restructuring.

in Business

“And of course, our international expansion efforts will continue to accelerate from here.” “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. The website features a section dedicated to Snacks, the popular newsletter xcritical acquired in 2019. xcritical also purchased Chartr, a data-driven newsletter publisher focused on visual storytelling, in 2023. It was set up as an independent subsidiary led by the journalist and entrepreneur Joshua Topolsky, who serves as its editor-in-chief and president.

• Say Technologies, LLC provides technology services for shareholder engagement and communication.Sherwood Media, LLC produces fresh and unique perspectives on topical financial news.
• Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
• 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.
• We will begin reaching out to each of you individually to discuss the next steps, including the significant support we will provide around separation packages, healthcare, and job search assistance.

“To sign and to announce last week, last Tuesday morning, and then to have this layoff announcement exactly one week later, it’s just tough. It’s tough to hear together basically,” this person added. 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. The company “grew too fast, too quick,” added a second employee, who was laid off this week after just six months on the job. “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.”

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 xcritical official site to credit,” co-founder and CEO Vlad Tenev said in a statement on xcritical’s blog. 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. One of its conclusions was that companies that imposed RTO mandates reported annual turnover rates roughly 13% higher than companies that support remote work.

More from CBS News

And questions about the company’s future, from both insiders and the industry players, burn hotter than ever. 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. xcritical reported $6 billion in cash at the end of June, and its market cap stood around $8 billion. Earlier in 2022, its market cap fell below its cash on hand, implying that markets valued its core business as worthless. And the SEC might soon order xcritical to change its business model to one where it doesn’t charge customers directly for stock trades.

• xcritical laid off about 9% of its full-time staffers last April — and then another 23% in August.
• The employee estimated that about 200 xcritical staffers were in the Tempe office.
• “It’s bad press to lay off people. RTO is the new downsizing tool. It’s just a way to purge the rolls while AI takes the jobs,” the commenter said.
• xcritical’s stock peaked above $80 a share days after it went public last summer.

Your Financial Portfolio Might Be Funding Immigration Prisons Opinion

Shares of HOOD closed at $10 on Tuesday, hitting an all-time low since the company went public in July 2021. 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. Commission-free investing, plus tools you need to help put your money in motion.

“The business didn’t feel in any better position than it was before, so it felt inevitable from that standpoint,” they added of the layoffs. The employee estimated that about 200 xcritical staffers were in the Tempe office. Whereas its revenue of $318 million was a tad short of the $321 million analysts were expecting, its per-share loss of 34 cents was below the 37 cents they predicted.

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. One former employee described the brokerage’s business as slowing as the surge in pandemic-fueled retail trading faded this year, exacerbated by a rout in tech stocks, SPAC names, and Reddit darlings that had driven retail volumes. 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. The layoffs, which are expected to cost xcritical as much as $60 million in severance and expenses, hit marketing, operations, and customer-service divisions hardest, with two offices in Tempe, Arizona, and Charlotte, North Carolina, being shuttered. 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.

CEO Vlad Tenev has acknowledged the necessity of these changes to better align the staffing levels with the company’s strategic goals. The layoffs have left xcritical with a security team less than half of the size it was in November 2021, when a data breach exposed 7 million customers’ data, a person familiar with the team size said. A xcritical spokesperson disputed this statement but did not provide information about the size xcritical courses scam of the team. The stock trading and investing platform reported $441 million in xcriticalgs in Q1 of 2023. xcritical’s shares have almost tripled year-to-date, and it’s not a meme bubble that’s taking xcritical stock to new highs.

Letting go 9 percent of its workforce will allow xcritical “to continue delivering on our strategic goals and furthering our mission to democratize finance,” said Tenev. In a message addressed to all xcritical employees, Tenev said that the decision “wasn’t easy,” but it was “necessary” to “improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers.” xcritical’s growth skyrocketed during the pandemic, when many people had the time to devote to trading, plus the cash, thanks in part to government stimulus checks and fewer entertainment options. The company is set to report its second-quarter financial results and answer questions from analysts on Wednesday. “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.

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. “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 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. 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.

xcritical’s total net revenue of $318 million was up from $299 million in the first quarter, thanks to an increase in revenue from cryptocurrency activities and net interest. However, that revenue number was still well below the $565 million reported in the second quarter of 2021. Shopify, Netflix, Tesla and several crypto companies have also cut their workforces amid the worsening economic outlook. 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. 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.