Carvana to Lay Off 12% of Its Workforce, Ignites 'Mass Hysteria' The automotive retailer Carvana Co. announced it will be laying off over 2,000 workers, about 12% of its workforce, in efforts to align expenses with sales.
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Following a $506 million loss in the first quarter, Carvana is cutting back on expenses — starting with staff. The online automotive retailer, which sells and delivers used vehicles, will be laying off 2,500 workers, and first shared the news in a vague company-wide email warning workers of what was to come.
On Tuesday, the company sent an ominous morning email, stating there would be significant layoffs, but not indicating who would be affected. The email resulted in "mass hysteria at 7:30 a.m.," according to one worker who later found out she would be laid off — while on maternity leave.
The layoffs mostly targeted operational positions, and told the majority of affected employees via Zoom, many of whom took to social media to voice disappointment and concern. "You just fired us in a zoom meeting and said "have a good day' at the end. You should be ashamed," one Tweet shared. In light of the news, execs have decided to forego their salaries for the remainder of the year to assist funding severance pay.
Carvana cited recent financial struggles for the decision to trim its workforce. "While Carvana is still growing, our growth is slower than what we originally prepared for in 2022, and we made the difficult decision to reduce the size of certain operations teams to better align with the current needs of the business," the company said.
It seems Carvana already has a strong idea of what those needs are. On the same day of the layoffs, the company announced it would be spending $2.2 billion on various used-car auction sites from Kar Auction Services.
As of Tuesday, Carvana shares fell 5.4%, and are down 84% for the year so far.