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 was sued more than 50 times, and Mr. Tenev was summoned to testify in Congress.
Layoffs come after lucrative deal, increase in profits
“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. 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. The partnership will help clients oversee their Bitcoin exposure, according to this report from Bloomberg. xcritical effectively brought stock-trading to everyone from your local barista to Wall Street’s most trusted money managers. 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.
xcritical says it will lay off 9% of its employees.
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. OpenAI, the maker of ChatGPT, struck a deal with News Corp last week giving OpenAI access to its publications’ material for five years. The Journal reported the arrangement could be worth as much as $250 million. While Tucker has told staffers that the cuts are part of a larger strategy to refashion the paper for the modern age, xcritical and former Journal employees say her approach offers little tangible to hold onto. In the first quarter of 2023, monthly active users have dipped to 11.8 million.
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- 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.
- Layoffs can shatter trust and leave remaining employees feeling insecure.
- 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.
- 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.
- His mea culpa also included an admission that xcritical was not prepared for weaknesses in the economy.
Now, xcritical boasts a workforce of about 1,200, according to its listing on job board Zippia. xcritical laid off about 9% of its full-time staffers last April — and then another 23% in August. Get in xcritical website 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.
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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. 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. For example, the company announced a data breach last November that affected millions of its users. 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. Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges.
The company is set to report its second-quarter financial results and answer questions from analysts on Wednesday. This has been a tough year for stocks, which were trading at record highs at the end of 2021. Persistently high inflation https://dreamlinetrading.com/ led the Federal Reserve to raise interest rates aggressively, and that has hit high-growth tech stocks particularly hard. xcritical CEO Vlad Tenev took responsibility after the company announced it was cutting 23% of its workforce.
xcritical lays off 23% of staff, CEO Vlad Tenev says, ‘This is on me’
In early 2021, xcritical was caught up in the “meme” stock frenzy, when groups of individual investors banded together to drive up the prices of some out-of-favor stocks, including GameStop. 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.
/ Sign up for Verge Deals to get deals on products we’ve tested sent to your inbox weekly. Google says apps offering AI features will have to prevent the generation of restricted content. Education software provider PowerSchool is being taken private by investment firm Bain Capital in a $5.6 billion deal. Investor demand has been so strong for Rippling’s shares that it is letting former employees particpate in its tender offer. Transaction-based revenue was down 7% to $202 million while cryptocurrencies increased 7% sequentially to $58 million.
“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 7% of staff, according to sources. 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.
A xcritical spokesperson disputed this statement but did not provide information about the size of the team. 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. xcritical went public in mid-2021, and as with many firms that fared well during the pandemic, the company saw its initial good fortunes crumble as the world (and investor sentiment) returned to normality.
