11:07 am, January 23, 2023
Online used car dealer Cazoo says all staff facing losing their job – regardless of how long they have worked for the company – will get redundancy payouts.
The company is consulting with thousands of staff across the UK after announcing it will shut 15 customer handover centres and keep all but three of its prep sites open.
Local paper reports claimed Cazoo had told its employees they may not get any redundancy cash ‘if they’ve served less than two years’.
The Wiltshire Times reported on fears of staff at its Westbury prep centre who said they didn’t know if they’d get any pay-outs after receiving an email.
However, Cazoo denies the claims made in the paper and said ‘all employees will be entitled to redundancy pay, with a minimum of four weeks basic salary’.
A spokesman confirmed this would be the case no matter how long they’d worked for the car dealer.
Companies are not entitled to pay redundancy to employees with less than two years’ service, but firms can choose to make payments nonetheless.
The extent of the company’s job cuts are not yet known in detail, but an all-hands call leaked to Car Dealer last week revealed 15 of its Customer Centres were facing the chop across the UK.
Only those in Bristol, Birmingham, Chertsey, Lakeside, Manchester, Northampton and Wembley are likely to remain open.
Just three of its preparation centres – snapped up as part of a host of multi million pound deals as the company grew rapidly – are set to remain open.
Four are earmarked for closure under the proposals – Westbury, Long Bennington, Livingston and Gloucester.
Sites at Portbury, Cold Meece and Bedford are the proposed prep centres to remain open.
More than 3,000 staff across the UK are said to be currently being consulted. The consultation period is due to end on March 4.
Staff at Cazoo’s Westbury prep centre told the local paper they were ‘upset and angry’ about the way Cazoo had run the site since it took over from previous owner Smart Fleet Solutions in February 2021.
The employee said: ‘We specialised in mobility cars and learner driver cars, and had contracts with big companies like British Gas and Enterprise, and we have a MOT centre.
‘As soon as Cazoo took over, they cut ties with all of those, the bread and butter of the company, and unfortunately it hasn’t taken off like they thought it would and this is the situation we are now in.
‘We feel that if enough people see it, then maybe they will see how ideal this is situated and maybe put in a bid for the yard and maybe work under somebody else and keep their jobs.’
Last week Cazoo told the New York Stock Exchange, it would be ‘closing more preparation centres and customer handover sites’.
The drastic move comes as the company slashes its sales forecasts for 2023 from around 65,000 used cars sold in 2022 to just 40,000 this year.
Chief customer officer Darren Bentley told staff on the leaked call: ‘We’re targeting sales volume this year of 40,000 units, which is a step backwards from the 60,000 that we did in 2022.
‘However, the challenge within that is that our current infrastructure and headcount is set up to support a significantly higher level of retail sales, in the region of 200,000, and therefore the business needs to restructure the business and to continue to align with that revised sales volume.
‘That’s necessary in order to get to the cost savings, and the business efficiencies that we’re looking for from across all the teams in the business.’
Cazoo has also slashed marketing and sponsorship deals including its shirt deal with Aston Villa and sponsorship of The Hundred.
Cazoo told investors: ‘In the current economic environment we believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway.’
Car Dealer Live – the future of the car dealer – exclusive conference features talks from leading car dealers, Google and Auto Trader among much more. Find out the full event details and book tickets.
