Carvana's vending machinesCarvana's vending machines


Carvana eyes significant earnings in 2023 after slump in demand, job cuts and disappointing Q1 losses

  • US online used car dealer reveals plans to boost profitability in FY23
  • Comes off the back of disappointing losses in Q1
  • Firm to cut around 2,500 jobs

Time 10:38 am, May 16, 2022

Online used car dealer Carvana is predicting strong earnings for 2023 after a disappointing start to 2022.

The American firm, which is well-known for its car vending machines, has revealed new plans to cut expenditure, including marketing and expansion, to balance out a fall in demand and return to profitability.

Carvana says it aims to slash expenditure in every quarter until it reaches approximately $50m in Q4.

It’ll then maintain that figure every quarter leading the firm to predict it’ll post a significant EBITDA for FY23, according to Reuters.

Shares jumped by 12.9 per cent on Friday (May 13) following the news.

Results published last week showed the online used car dealer suffered a poor first quarter.

Total losses came to $260m for the period, with shares falling 59 per cent since late April, according to the Wall Street Journal.

The company is now planning on cutting 12 per cent of its workforce, or around 2,500 layoffs.

Carvana said the poor financials were the result of a fall in demand for used cars, sky-high prices and supply shortages.

The news across the pond comes as Cazoo in the UK admitted it ‘may never achieve profitability’ and rumours swirl rival Carzam has reached the end of the road.

Carvana customers can order their used car online and have it delivered to their home, or collect the car from one of the company’s famous vending machine towers.

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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