Carvana is making changes to its staff in response to a growing trend of Big Tech and eCommerce businesses reevaluating their revenues, as well as a drop in the used-car retail market.
A representative from the company confirmed with PYMNTS Friday (Nov. 18) that it plans to lay off nearly 1,500 employees from its online new and second-hand car buying platform, a total 8% of Carvana’s workforce.
Amazon and Meta already been cut down their staff this month by 10,000 and 11,000, respectively.
But unlike other companies, Carvana has been up against a falling sector, resulting in less-than-stellar earnings in its latest report. The company saw a 3% decline in revenue, an 8% drop in retail units sold, and a 31% dive in total gross profit in the quarter ending Sept. 30.
Ernie Garcia, CEO and founder of Carvana, indicated in the report, release Nov. 3, that the company would be looking to make belt-tightening measures in the coming quarters to increase revenue.
“We plan to continue to rapidly reduce expenses, to continue to put our focus on efficiency gains throughout every area of the company, and to continue to evaluate and test what levers we should pull to maximize the number of our more profitable sales and to minimize the number of less profitable sales,” he said on an earnings call.
Carvana also said in a letter to shareholders released the same day that used car sales have gotten worse industry-wide, which has also contributed to the company’s latest decisions.
“Cars are an expensive, discretionary and often financed purchase that inflated much more than other goods in the economy over the last couple of years, and that is clearly having an impact on people’s purchasing decisions,” Garcia said in the letter.
The company said in the letter hat it expects a sequential drop in the number of retail units sold during the current quarter.
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