Carvana cuts 2,500 jobs after posting net loss of $506M

In a regulatory filing this week, Carvana said that it has laid off 2,500 of its employees, accounting for 12% of its workforce. Most of the affected employees were reportedly working in “operational positions,” The layoffs came after the used car retailer reported a net loss of $506 million despite bringing in $3.497 in revenue for the quarter. 

In this week’s Form-8K filing with the U.S. Securities and Exchange Commission, Carvana said that the layoffs are one component of its “previously announced plans to better align staffing and expense levels with sales volumes.” According to an internal email, Carvana’s Chief Executive Officer, Ernie Garcia, said the layoffs were due to “all time high car prices slowing sales to recession levels.” 

While this was not the case for all terminated employees, some took to social media to announce they had been fired via a Zoom call. 

The company said affected employees will have the “opportunity to receive four weeks of pay plus an additional week for every year they have been with Carvana” and other offerings, like “the opportunity to receive extended healthcare.” Carvana also said its executives will not be taking their salary for the rest of 2022, noting the money will be used “to help contribute to the severance pay for departing team members.”

This week’s regulatory filing also said that Carvana is looking to “better align sales with expense levels through a combination of higher sales and expense efficiencies” throughout the “next several quarters,” which some analysts say may mean more layoffs are possible in the future. 

Did you enjoy this article from Kimberly Hurley? Read other articles on CBT News here Please share your thoughts, comments, or questions regarding this topic by submitting a letter to the editor here, or connect with us at newsroom@cbtnews.com.