Carvana layoffs: Carvana lays off 1,500 in Nov. 2022 email

The used car market skyrocketed during the pandemic but is currently facing strong economic headwinds.

Used car retailer Carvana is laying off about 1,500 people, or 8% of its workforce, CEO Ernie Garcia said in an email to employees on Friday that CNBC and The Wall Street Journal get.

Garcia cited strong economic headwinds as customers delay large purchases, like cars, amid higher financing costs: “We didn’t accurately predict this would play out. and its impact on our business,” he wrote.

This is Carvana’s second round of job cuts this year; 2,500 employees were laid off in May.

The Arizona-based company, which offers online buying and selling, has grown rapidly during the pandemic as used car prices have skyrocketed. Recent high prices and rising interest rates have hit the used car market hard.

“The market slowdown is a core issue,” Jessica Caldwell, chief executive officer of Edmunds.com, told The Associated Press after shares tumbled this month. She said some used car dealers have paid many dollars for used car models, only to find that prices have dropped over the past few months.

In addition, the supply of new vehicles, long constrained by a shortage of computer chips that cut production, is improving, drawing buyers away from higher-end used cars. she said. New car sales also benefited from automakers subsidizing lower-interest loans.

The layoffs primarily affect Carvana’s company and technology teams, as well as some operations positions, Garcia wrote. Affected employees have been promised severance pay, three months of health care insurance and other benefits.

Carvana shares fell 3% Friday to $8.06. The company’s stock has fallen about 97% this year.

“Today is a tough day,” Garcia wrote. “The world around us is getting tougher and tougher, and to do what’s best for our business, we have to make some painful choices to adapt.”

Some of the world’s biggest tech companies have cut their workforces in recent weeks. Amazon announced mass layoffs extending into next year, Facebook owner Meta is laying off 11,000 employees, and Twitter’s new CEO, Elon Musk, has cut the company’s workforce for the first half of this month.

RELATED: Amazon CEO Says Layoffs Will Extend To Next Year

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RELATED: Twitter offices close after Musk’s ‘tough’ ultimatum causes more resignations

https://www.king5.com/article/news/nation-world/carvana-layoffs-november-2022/507-d5f77f3f-a7f2-4079-bc4c-d7aef14a5732 Carvana layoffs: Carvana lays off 1,500 in Nov. 2022 email

Edmund DeMarche

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