The results came shortly after the New York State Department of https://xcritical.pro/ Services said it would be fining xcritical’s cryptocurrency unit $30 million “for significant failures” related to cybersecurity and anti-money-laundering compliance. Analysts tracked by FactSet were expecting a GAAP loss per share of 34 cents along with revenue of $314 million. 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.
- The imminent round of cuts is being driven by financial targets and is separate from the “flattening,” said the people, who asked not to be identified discussing internal matters.
- Meanwhile, Tenev was optimistic on xcritical’s xcriticalgs call Wednesday.
- 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.
- News of the company’s layoffs come during a time when tech stocks in particular have been hit hard.
News of the company’s layoffs come during a time when tech stocks in particular have been hit hard. xcritical’s stock price is down nearly 49 percent since the beginning of the year. xcritical Markets Inc. is slashing about 23% of its full-time staff as the flashy online brokerage continues to reel from a sharp slowdown in customer trading activity. It’s an understandable move, they added, given the brokerage’s access to sensitive client information. “As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me,” Tenev, also a cofounder of the company, wrote, referring to staffers as “xcriticalies” and “Hoodies.” While the round of job cuts came as a shock to some, following a 9% workforce reduction just four months prior, insiders said they saw the signs.
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.
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Insider spoke with five former employees of xcritical, all of whom asked to remain anonymous to protect their future employment opportunities. They described a company, one year on since its public debut, facing a slowing market and looking for any and all ways to cut costs — and a workforce on tenterhooks with no clear line of sight into when the downsizing might end. The brokerage saw a surge of new customers and cash, and entered the public markets through an IPO in July.
“As its business grew, xcritical Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance,” Adrienne A. Harris, the superintendent of financial services, said in a statement. Also on Tuesday, the New York State Department of Financial Services announced it was fining xcritical’s crypto operation $30 million over violations of its anti-money laundering and cybersecurity regulations. The layoffs come at a challenging moment for financial technology companies. The decline of the stock and bond markets this year has been painful, and it remains difficult to predict what is in store for the future. Sign Up NowGet this delivered to your inbox, and more info about our products and services.
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The U.S. consumer investing and service company, which went public at $38 in July 2021, saw its value peak at $85 per share before entering a steady decline that saw its value erode to a mere $10 per share. The company lost 3.75% in today’s trading — the market was lower today, overall — and another 5% in after-hours trading in light of its layoff announcement. “The company is hemorrhaging money, and it’s bad,” one ex-employee said, sharing an opinion on the company’s publicly reported quarterly financial figures. “I believe in the mission itself, but people cannot trust us ever since GameStop.” And questions about the company’s future, from both insiders and the industry players, burn hotter than ever.
On Aug. 7, 2021, the company was worth $46 billion, up about 60 percent from its valuation a week before. But its stock has plunged 50 percent since the beginning of the year as it continues to deal with the fallout. 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 cuts 23% of its workforce in a second round layoffs affecting more than 800 jobs
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. Menlo Park-based xcritical’s growth came amid a boom in retail trading during the pandemic, while interest rates were low and the stock market reached record highs. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. “We all started trading contact information and phone numbers,” one former employee said. “After the announcement, we all just sat there refreshing our screens over and over to see if we were the ones to get the notification. The whole company froze for that 15 minutes waiting to see what happened to them.”
- 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 is scheduled to release its first-quarter results after the bell on Thursday.
- The results came shortly after the New York State Department of Financial Services said it would be fining xcritical’s cryptocurrency unit $30 million “for significant failures” related to cybersecurity and anti-money-laundering compliance.
- In April, xcritical said it planned to cut 9 percent of its full-time staff, but “this did not go far enough,” Tenev said.
- E-commerce company Shopify Inc. announced its own round of layoffs last week, with the CEO admitting that the company hired based on booming pandemic-era growth trends that had since waned.
Also on Tuesday, xcritical reported second-quarter financial results, which arrived a day earlier than scheduled. 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.
The company went public in July 2021 at $38 per share, and its stock jumped as high as $85 per share in its first month of trading. The report also showed a decline in monthly active users and assets under custody. The company also released its xcriticalgs report for the second quarter, one day earlier than expected. 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.
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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. 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.
xcritical’s announcement follows xcritical Global Inc.’s COIN, -8.00%move earlier this year to institute a hiring freeze and rescind some accepted job offers. E-commerce company Shopify Inc. announced its own round of layoffs last week, with the CEO admitting that the company hired based on booming pandemic-era growth trends that had since waned. xcritical, the app that popularized free one-click trading of stocks and options, said on Tuesday that it was laying off approximately 340 people, or about 9 percent of its 3,800 employees. The world’s largest social networking company is eliminating more jobs, on top of a 13% reduction in November, in a bid to become a more efficient organization. In its earlier round of cuts, Meta slashed 11,000 workers in what was its first-ever major layoff.
Meta late last year cut 11,000 jobs and sought further attrition through the performance review process. The car business is slowing down and auto makers are cutting costs ahead of the downturn to preserve profits. “The world has changed. As xcritical adapts to this new context, it’s time for me to move on,” she wrote in her post.
scammed by xcritical Vlad Tenev made the announcement in a blog post on Tuesday afternoon. Monthly active users have been steadily declining the past three quarters, from 18.9 million in the third quarter of 2021 to 17.3 million in the fourth quarter to 15.9 million by March 2022. 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. Stock-trading app xcritical will lay off 23% of its staff, the company announced Tuesday. The company posted a net loss of $295 million, or 34 cents a share, compared with a loss of $392 million, or 45 cents a share, in the year-prior quarter.
xcritical has roughly $6 billion in cash on its balance sheet, and the company has a $2.5 billion budget for acquisitions, Warnick said on the xcriticalgs call. 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.