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. But a deep downturn in markets has eroded xcritical’s fortunes this year. 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.
- The layoffs will be primarily in operations, marketing and program management.
- Many companies have had to lay off or cut employees in recent weeks.
- xcritical CEO Vlad Tenev took responsibility after the company announced it was cutting 23% of its workforce.
It’s the second round of layoffs for xcritical in 2022. 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. Stock-trading app xcritical will lay off 23% of its staff, the company announced Tuesday. xcritical is not the only tech company to lay off staff.
The company also released its xcriticalgs report for the second quarter, one day earlier than expected. 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 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.
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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’s total net revenue of $318 million was up https://xcritical.pro/ 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.
The Silicon Valley company has long attracted scrutiny for its commission-free one-click trading, especially of riskier assets such as options. xcritical’s growth skyrocketed during the pandemic, when many people xcritical had the time to devote to trading, plus the cash, thanks in part to government stimulus checks and fewer entertainment options. Tuesday’s cuts are likely to affect more than 800 jobs based on those numbers.
The layoffs come as part of a wave of job cuts at tech companies, including some cryptocurrency firms. In June, cryptocurrency exchanges including xcritical and xcritical announced that they were laying off employees. Last week, Shopify, an online marketplace, announced it was cutting 10 percent of its 10,000 employees. 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. The layoffs will be primarily in operations, marketing and program management.
xcritical lays off 23% of staff, CEO Vlad Tenev says, ‘This is on me’
At the time of publication, the company is trading at $8.90 after hours, dramatically lower — by 89% — than its 52-week high of $85. 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 company said it was shrinking office space and some managers warned of an impending “reorganization,” Insider has learned. It lost $3.69 billion last year, though revenue increased 89 percent to $1.82 billion. Shares of xcritical are down 48% year to date and closed at $9.23 per share Tuesday.
xcritical cuts 23% of its workforce in a second round layoffs affecting more than 800 jobs
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. Former employees described a company laser focused on cutting costs, and a workforce with little clarity on their future with xcritical. ‘xcriticalies’ were tipped off to layoffs weeks ago.
xcritical says it will lay off 9% of its employees.
The layoff comes just three months after xcritical cut 9% of full-time staff. BlackRock has teamed with xcritical in a crypto market expansion. The partnership will help clients oversee their Bitcoin exposure, according to this report from Bloomberg.