Carvana, a used car dealer, founded a decade ago, owns meteoric growth It was With quite a few problemsOn Tuesday, it said it would lay off 2,500 employees, with executives not being paid for the rest of 2022.
at Deposit with the Securities and Exchange CommissionCarvana described the move as a “right size” initiative.
On May 10, 2022, Carvana Corporation (“Carvana”) announced a workforce reduction of approximately 2,500 employees primarily in its operational groups in connection with its previously announced plans to better align staffing and expenditure levels with sales volumes.
All affected team members will have the opportunity to receive four weeks of pay in addition to an additional week for each year spent with Carvana. Affected team members will also have the opportunity to receive extended health care coverage, payment equivalent to the early accrual of certain previously awarded stock awards, employment and resume support, and to continue to participate in some of the company’s other programs. The executive team forgoes their salary for the remainder of the year to help contribute to severance pay for departing team members.
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We believe that these decisions, while very challenging, will result in Carvana restoring a better balance between its sales volume and employment levels and facilitate Carvana’s return to effective growth in its mission to change the way people buy and sell cars.
Separately on Tuesday, Redditor Spread What they said was an email sent to Carvana employees, which says various industry stresses – supply chain issues, high interest rates and inflation, slow car sales due to “high car prices all the time” – mean that Carvana growth It was slower than expected. The email, which we didn’t verify but appears legitimate, says the layoffs add approximately 12 percent of Carvana’s employees, and provided the same information about terminations of affected employees contained in the SEC filing.
Perhaps layoffs were inevitable considering Carvana It reported its first ever drop in sales in April of this year—A year in which used car prices and demand are high Still at unprecedented levels. It’s worth noting that in conjunction with the revelations about these mass layoffs and executive pay cuts, Carvana announced this morning that it will Paying $2.2 billion to buy auto wholesaler Adesa US. , which operates 56 auction sites across the country.
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