Used car seller Carvana is planning to cut nearly 1,500 workers, around eight percent of its workforce.

This comes at a time when the firm is struggling with economic challenges and has a bleak outlook for the future.

Chief Executive Ernie Garcia said the layoffs will hit its corporate and technology teams and some operations teams.

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He says the reductions will be through eliminated positions, locations or shifts.

The cut also includes the 2,500 jobs the firm intended to slash earlier this year after it overshot its growth strategy.

Mr. Garcia said: “We failed to accurately predict how this would all play out and the impact it would have on our business.

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“To those impacted, I am sorry. As you all know, we made a similar decision to this one in May. 

“It is fair to ask why this is happening again, and yet I am not sure I can answer it as clearly as you deserve.”

After the pandemic’s aggressive growth, many tech firms are shedding their workers. 

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During that period people were required to stay indoors and did more online shopping. 

Many tech businesses are seeing declining revenues as people return to pre-pandemic habits due to ongoing inflation and rising interest rates. 

People have shifted from buying or financing new cars since high-interest rates and inflation have made them unaffordable. 

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Carvana has been actively trimming expenses this year as the economy has become shakier. 

Employees who were laid off will get separation and severance pay until January 1, 2023. 

For each full year of tenure, they are entitled to one additional week of severance pay. 

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Other benefits include three months of extended healthcare coverage and priority consideration when Carvana resumes hiring, among other things. 

Before recent rounds of layoffs, the used car retailer had 21,000 employees at the start of the year.

Company representatives declined requests for comments.

Source: The Wall Street Journal

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