xcritical Engineering Head Exits, Leaked Audio Reveals More Layoffs
“I believe in the mission itself, but people cannot trust us ever since GameStop.” The company said it was shrinking office space and some managers warned of an impending “reorganization,” Insider has learned. 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.
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. Posts on a private group for people with a xcritical.com email address on the tech-industry chat app Blind suggests layoffs as recently as Thursday, according to screenshots viewed by Insider.
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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.
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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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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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The Swiss bank is expected to finalize the plans over the coming months. By Jay Peters, a news editor who writes about technology, video games, and virtual worlds. He’s submitted several accepted emoji proposals to the Unicode Consortium.
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. “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. “Could xcritical official site we get some transparency here? How many hoodies have been eliminated, how many more will be and how much longer will this go on.” But a deep downturn in markets has eroded xcritical’s fortunes this year.
The stock trading and investing platform reported $441 million in xcriticalgs in Q1 of 2023. xcritical is laying off more employees xcritical 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 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.
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.
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.
Former employees described a company laser focused on cutting costs, and a workforce with little clarity on their future with xcritical. Tuesday’s cuts are likely to affect more than 800 jobs based on those numbers. Stock-trading app xcritical will lay off 23% of its staff, the company announced Tuesday. “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.” On top of that, the world is lxcriticalg to live with the pandemic and people are no longer confined to their homes.
“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.
- Credit Suisse weighs cutting thousands of jobs, according to Bloomberg.
- “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.
- Shares of xcritical fell nearly 4% on Thursday while the S&P 500 fell nearly 2%.
- X1 and xcritical’s future in credit cards were the focus of the company’s last all-employee meeting, the person said.
- According its annual report, xcritical had about 3,800 employees in 2021, which was slashed to about 2,300 by the end of 2022.
“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.
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. Shopify, Netflix, Tesla and several crypto companies have also cut their workforces amid the worsening economic outlook. 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.