8:30 am, November 21, 2022
Online used car dealer Carvana has announced another round of job cuts as it battles to slash costs.
The US-based firm, which is said to have inspired Cazoo and is well known for its car vending machines, is set to axe around 1,500 jobs, or eight per cent of its workforce.
Carvana is facing higher costs in the face of rising interest rates and a softening in demand of used cars, said Reuters.
In an email sent on Friday (Nov 18) from Carvana CEO Ernie Garcia – seen by CNBC, which first broke the news – entitled ‘Today is a hard day’, employees were told of the increasing headwinds affecting the business.
‘Today is a difficult day. The world around us has continued to get tougher and to do what is best for the business, we have to make some painful choices to adapt,’ said Garcia.
He also said Carvana had ‘failed to accurately predict how this would all play out and the impact it would have on our business’.
Carvana’s share price closed on Friday at $8.06 per share, down by 3.1 per cent.
Earlier this month, its share price reached an all-time low of $6.68.
Overall, the troubled firm has lost a whopping 97 per cent of its value this year, following all-time highs of $376.83 per share last August.
The job cuts follow a similar round of lay-offs in May which totalled around 2,500, or 12 per cent of the company’s workforce.
Hybrid working and rising interest rates have led to a softening in demand for used cars in the USA.
As a result, Carvana has recently had to sell off cars it acquired at high prices for far lower prices.
