PHOENIX — Online automotive retailer Carvana Co. says it's letting go about 2,500 workers, roughly 12% of its workforce, as it tries to bring staffing and expenses in line with sales.
The Phoenix company said in a regulatory filing Tuesday that its executive team is giving up salaries for the rest of the year to help fund severance pay for the workers.
Carvana, which sells online and delivers used vehicles to buyers and is known for its multi-story car vending machines, says the laid-off workers will come from operational groups. The company says it will be “transitioning operations" away from its auto reconditioning center in Euclid, Ohio, near Cleveland, as well as from some logistics hubs.
The filing said the moves are difficult, but will “facilitate Carvana returning to efficient growth on its mission to change the way people buy and sell cars."
"I wish the burden were shared more evenly across the company, but our operations teams have grown the most over the last several months and are therefore furthest out of balance with the sales we are seeing," Carvana's CEO and founder Ernie Garcia said in an email obtained by 12News in Phoenix.
Those being laid off will receive four weeks of pay plus one week for every year they have been with the company, the email said. The company will also be providing extended healthcare for three months, among other severance points.
"We aim to carry out this difficult decision in a transparent and thoughtful manner while providing meaningful assistance, resources and support to impacted team members," a Carvana spokesperson said.
The layoffs come just a few weeks after Carvana posted a $506 million loss in the first quarter, six times larger than the same period a year ago.
The company also recently acquired Adesa U.S.'s used vehicle auction business for $2.2 billion.
Carvana shares fell 5.4% Tuesday to $36.68. They are down 84% so far this year.