XP announces cut of 782 employees in the face of high financial instability

In times of high financial market instability, the XP investment platform announced an 11% headcount reduction in the first quarter of 2023.

Which represents a decrease of 782 employees, according to the balance sheet presented this Monday, the 15th. The measure was due to the high interest rate that discouraged investor demand for riskier assets and put pressure on technology business.

XP ended the month of March with 6.146 employees, against 6.928 in December 2022. According to the company, a factor that contributed to the reduction in the headcount was the increase in efficiency through the increased digitalization of its operations.

In addition, an excess of hiring that occurred during the pandemic was also cited among the reasons for the decrease in the number of workers. “XP Inc. demonstrated humility in recognizing some excesses committed during the pandemic, and agility with execution capacity to put its cost structure back where it should be, as it should be in any company of owners”, said Bruno Constantino, partner and financial director of XP Inc.

XP's CEO, Thiago Maffra, highlighted that the macro outlook in Brazil remains challenging.

According to him, the investment platform has been facing a high interest rate environment similar to that observed in other world economies. Maffra added that restructuring costs is essential for XP to remain competitive and achieve its goals.

During the teleconference that took place to comment on the results, Maffra informed that XP does not foresee additional cuts in the staff. However, the executive informed that the episode involving the Americanas' judicial recovery negatively impacted the capital market and corporate credit, putting pressure on financial advisory activity, since many investors are keeping their funds in low-risk liquid products while waiting for the scenario to improve.

XP posted a net profit of R$796 million in the first quarter of the year, which represents a 7% drop compared to the same period last year. Analysts expected, on average, a net profit of R$ 800,8 million in the period, according to data from Refinitiv.

The platform's net funding dropped by 65%, totaling BRL 16 billion, while net revenue was stable in the annual comparison, totaling BRL 31 billion. For Maffra, given the high level of uncertainty in the market, the pace of funding is unlikely to return to the standards seen in the recent past.