Business

Carvana is laying off 12% of its workers, and executives will not be paid for the remainder of the year

DETROIT — Carvana Co., an online automobile retailer, is laying off nearly 2,500 employees, or about 12% of its workforce, as it works to align staffing and expenses with revenues.

In a regulatory filing on Tuesday, the Phoenix company said its leadership team will forego their wages for the rest of the year to help fund the workers’ severance pay.

The laid-off workers will come from Carvana CVNA, -5.39 percent, which sells used autos online and delivers them to purchasers. The company is “transitioning activities” away from its auto reconditioning centre in Euclid, Ohio, near Cleveland, as well as some shipping hubs, according to the company.

The changes will “enable Carvana returning to efficient growth on its aim to revolutionise the way people purchase and sell vehicles,” according to the filing.

The layoffs came just weeks after Carvana reported a $506 million loss in the first quarter, which was six times higher than the same period last year.

The corporation also just paid $2.2 billion for Adesa U.S.’s used automobile auction division.

Carvana’s stock dropped 5.4 percent to $36.68 on Tuesday. So far this year, they’ve lost 84 percent of their value.

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Kathy Lewis

Kathy Lewis is an all-around geek who loves learning new stuff every day. With a background in computer science and a passion for writing, she loves writing for almost all the sections of Editorials99.

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