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Used-car Retailer, Carvana, Known For Its Automated Car Vending Machines, Lays Off 12% Of Workforce
Used-car retailer Carvana to lay off 2,500 employees – or 12% of its workforce – following poor quarterly performance.
The online used-car retailer is best known for its automated car vending machines.
The move is part of its efforts to return to profitability following poor quarterly performance.
Affected team members would get 4 weeks of pay + additional week for every year they’ve ve been with the company.
The company also said that its executive team would forego their salaries for the remainder of the year.
Used-car retailer, Carvana Co says it would lay off about 2,500 employees – or 12% of its workforce – as part of its efforts to return to profitability following poor quarterly performance.
The online used-car retailer, best known for its automated car vending machines, have lost more than 50% since raising $1.25 billion in an equity offering last month.
Carvana allows customers to buy a used car online and have it delivered or pick it up from an automated-tower, in Austin, Texas, United States.
But demand for used cars has waned on the back of sky-high prices and supply shortages, with Carvana saying it did not see the typical seasonal demand during the first quarter this year.
Carvana recorded about $220 million in capital expenditure for the first quarter. It plans on slashing its budget every quarter until it reaches about $50 million in the fourth.
The company said it plans to move operations away from its inspection center in Euclid, Ohio and a few logistics hubs. It said the move will allow it to restore a better balance between its sales volumes and staffing levelsm
Tempe, Arizona-based Carvana had over 21,000 full-time and part-time employees at the end of Dec. 31, as per its latest annual filing.
Carvana on Tuesday said all impacted team members, primarily in operational groups, would receive four weeks of pay and an additional week for every year that they have been with the company.
The company also said that its executive team would forego their salaries for the remainder of the year.
