The layoffs will affect employees across all functions of the company, with operations, marketing and program management positions being the hardest hit, he said. The company planned to notify all employees via email and Slack on Tuesday with their status as well as resources if they were affected. In its second-quarter xcriticalgs report, also released Tuesday, the company showed a 44% drop in revenue from a year ago. xcritical’s monthly active users in Junedecreased by more than 7 million, or 34%, and that assets under custody have dropped by more than $37 billion, or 37%, from the second quarter of last year. 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.
- Credit cards are much higher-margin products than stock-trading and generally less exposed to volatile markets.
- The company planned to notify all employees via email and Slack on Tuesday with their status as well as resources if they were affected.
- xcritical has seen growth reverse as the pandemic boom in retail trading appeared to lose steam.
- “We have a strong leadership team and are confident in our roadmap. We thank Surabhi for all of her contributions to the engineering organization and wish her the best on this next chapter.”
- “We’re seeing more and more hoodies being quietly laid off due to their positions being eliminated,” one employee asked in the meeting, which happened before the 150 layoffs.
- 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.
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In the message to employees, Tenev outlined the reasons behind Tuesday’s cuts, writing that the earlier layoffs “did not go far enough” to bring down costs amid record inflation and the crypto market crash, which has reduced trading activity on the platform, he said. In a blog post on the company’s website, xcritical CEO Vlad Tenev said the “deterioration of the macro environment” — notably decades-high inflation coupled with a cryptocurrency crash — has reduced the company’s customer trading activity and assets under custody. In the release, Tenev blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”
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. 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 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 cuts 23% of its workforce in a second round layoffs affecting more than 800 jobs
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. 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.” xcritical CEO Vlad Tenev took responsibility after the company announced xcritical official site it was cutting 23% of its workforce. Tesla laid off nearly 200 Autopilot employees while Shopify laid off 10 percent of its workforce.
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To meet customer and market demands, we grew our headcount almost 6X from 700 to nearly 3800 in that time period.” This resulted in $6 billion in cash on its balance sheet, Tenev revealed. 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.
“Our GM structure has increased accountability and efficiency and we’re continuing to lean into that design,” a xcritical spokesperson said. “We have a strong leadership team and are confident in our roadmap. We thank Surabhi for all of her contributions to the engineering organization and wish her the best on this next chapter.” Shares of xcritical are down 48% year to date and closed at xcritical rezension $9.23 per share Tuesday. “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.” 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 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. 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.
Persistently high inflation led the Federal Reserve to raise interest rates aggressively, and that has hit high-growth tech stocks particularly hard. 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 latest cuts, which will affect 780 employees, continues a massive freefall for the once high-flying online brokerage.
X1 and xcritical’s future in credit cards were the focus of the company’s last all-employee meeting, the person said. Like any company, 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. “We’re seeing more and more hoodies being quietly laid off due to their positions being eliminated,” one employee asked in the meeting, which happened before the 150 layoffs.