Effexor XR extended-release capsules are used for treating depression, generalized or social anxiety disorder, or panic disorder. It may also be used for other conditions as determined by your doctor. Effexor XR extended-release capsules are a serotonin-norepinephrine reuptake inhibitor (SNRI). It works by restoring the balance of certain natural substances in the brain (serotonin and norepinephrine), which helps to improve certain mood problems.