Carvana Lays Off 1,500 Employees After Stock Crash

Calvana CNBC cut about 1,500 people, or 8% of its workforce, on Friday after its stock plunged this year, the used-car market weakened, and concerns about the company’s long-term trajectory, according to an internal message first obtained by CNBC. Temporary dismissal.Scott Wapner

An email from Carvana CEO Ernie Garcia, titled “Today is a Tough Day,” refers to economic headwinds such as rising financing costs and delays in car purchases. He said the company “couldn’t have accurately predicted how this would unfold and what impact it would have on our business.”

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“Today is a difficult day. The world around us is getting tougher and we have to make some painful choices to adapt if we want to do our best in business,” Garcia said Friday. wrote in an email to employees of

Layoffs spur an increase in tech-focused job cuts amid rising interest rates, persistent inflation and fears of a recession. Some Mistakes During the Coronavirus Pandemic To make better use of the unprecedented boom in the used car market.

Carvana shares fell 3.1% to close at $8.06 per share on Friday.carvana strains about 97% plunge This year, after reaching an all-time high of $376.83 per share on August 10, 2021.

A Calvana spokeswoman confirmed the letter’s authenticity but declined to comment further.

According to the letter, the layoffs will primarily affect employees in Carvana’s corporate and technical divisions, as well as “eliminating roles, locations, or shifts to match the current environment and the size of our company.” Affects departmental management.

Garcia said affected employees will receive severance pay, severance pay, an extension of medical coverage for three months, and other benefits.

“I’m sorry for those affected,” Garcia said. “As you know, we made a decision similar to this back in May. It’s natural to ask why this is happening again, but I’m not sure if you can answer as clearly as you deserve. I do not understand.

Carvana grew exponentially during that time pandemicwith the promise of being able to easily sell and buy used cars in customers’ homes, as shoppers moved to online purchases rather than visiting dealers.

However, Carvana did not have enough vehicles to meet the surge in consumer demand, nor did it have the facilities or employees to handle the fleet it had in stock. This prompted Carvana to buy his ADESA, a record number of vehicles at very high prices as demand slowed amid rising interest rates and fears of a recession.

The layoffs come two weeks after the recent stock market crash after the company underperformed Wall Street sales and earnings expectations. third quarterCarvana reported a decline in revenue, profit and sales compared to the same period last year.

Morgan Stanley Ratings and price targets withdrawn For stocks following results. Analyst Adam Jonas cited a deteriorating used-car market, the company’s debt and a volatile funding environment.

Read the full email from Carvana CEO Ernie Garcia.

Download full documentation here.