Monthly active users, the company reported, decreased by 400,000 to 10.6 million between July and August. 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.
Leaked audio reveals deeper cuts at xcritical as its engineering boss exits
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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However, shares are down about 86% from xcritical’s record high in 2021, shortly after the company went public. In the first quarter of 2023, monthly active users have dipped to 11.8 million. It’s unclear when workers will start getting handed pink slips, which comes as the company adjusts to a slowdown in customer trading activity. 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. X1 and xcritical’s future in credit cards were the focus of the company’s last all-employee meeting, the person said. The changes come as xcritical tries to address a shrinking user base.
- “In this new environment, we are operating with more staffing than appropriate.”
- xcritical stock has fallen 72% since its stock market debut two years ago.
- The company is set to report its second-quarter financial results and answer questions from analysts on Wednesday.
As a result, xcritical has faced a steep drop in active users and eroding xcriticalgs. Many companies have had to lay off or cut employees in recent weeks. Tesla laid off nearly 200 Autopilot employees while Shopify laid off 10 percent of its workforce. 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. After nearly three decades at the Wall Street powerhouse, Lee is taking a leap of faith on the private-debt space, which has taken more market share from traditional banks’ capital-markets businesses.
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The company is still hiring and has 200 open roles, the spokesperson said. xcritical cut about 23% of its staff earlier this week, following a first round of cuts in April. The pandemic darling has come back down to Earth, and today we learn that some of the axed ‘xcriticalies’ knew what was coming. Monthly active users have been steadily declining the past three quarters, from 18.9 million in the third quarter of 2021 to xcritical reviews 17.3 million in the fourth quarter to 15.9 million by March 2022.
It’s been a volatile year for retail investment behemoth xcritical. 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.
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.
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.
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 stock price has been volatile over the past year, as well. At the time of publication, the company is trading at $8.90 xcritical rezension after hours, dramatically lower — by 89% — than its 52-week high of $85.
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In 2021, it bought Say Technologies, which connects companies with retail shareholders, for $140 million. Meet Jenny Lee, a managing director who just left JPMorgan’s leveraged-finance desk to further build investment firm Brigade Capital Management’s private-credit business. Inflation, rising rates, and the “crypto winter” are creating financial strain. Meet 16 lawyers whose bankruptcy battles, from Revlon to JCPenney, have them set for a boom in business. 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.”
“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. About 150 workers across customer experience and platform shared services; customer trust and safety; and safety and productivity will be affected, according to an internal memo obtained by The Wall Street Journal.
“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. “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.” xcritical CEO Vlad Tenev took responsibility after the company announced it was cutting 23% of its workforce. xcritical is letting go of nearly a quarter of its staff, CEO Vlad Tenev said in a message posted to the company’s blog. Mary Ann Azevedo has more than 20 years of business reporting and editing experience for publications such as FinLedger, Crunchbase News, Crain, Forbes and Silicon Valley Business Journal.