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Used car retailer Carvana will lay off 2,500 people in post-Covid price slide



Carvana will lay off about 2,500 employees, or 12 percent of its workforce, the company said on Tuesday, as the online used-car retailer turns profitable a few weeks later. report bad results.

While the pandemic provides a perfect opportunity for Carvana’s online business model to shineShortages in the industry also forced the company to burn through cash to buy inventory.

Shares of the company, best known for its car vending machines, pared losses as they traded 1% lower at $38.43 in afternoon trading. They have lost more than 50% since raising $1.25 billion in an equity offering last month.

Carvana has missed earnings expectations for the past three quarters due to rising costs and demand for old car slippage due to sky-high prices and scarcity of inventory.

The company, in a securities filing on Tuesday, said it plans to move operations away from its inspection center in Euclid, Ohio, and a few logistics centers.

The move will help Carvana restore a better balance between sales volume and employee levels, it added.

Tempe, Arizona-based Carvana had more than 21,000 full- and part-time employees as of December 31, according to its latest annual filing.

Carvana on Tuesday said all affected team members, mainly in operations teams, will receive four weeks of pay and an additional week for each year they have worked with the company.

The company also said its executive team will ignore their paychecks for the rest of the year.

Carvana earlier on Tuesday closed a deal to acquire Carmel’s US-based KAR Global physical car auction enterprise, ADESA, for $2.2 billion.

(Reporting by Nathan Gomes in Bengaluru; Editing by Shailesh Kuber)



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