Online used automobile retailer Carvana will lay off 2,500 people – around 12 percent of its workforce – as it attempts to align personnel and expenditures with revenues.
The Phoenix-based business said in a regulatory statement on Tuesday, May 10, that its executive team is reducing salaries for the remainder of the year to help cover workers’ severance pay.
Carvana, which buys and distributes used vehicles online, says the layoffs would be from operations units.
The company stated it would “transition activities” away from its auto reconditioning center in Euclid, Ohio, near Cleveland, as well as from other shipping hubs.
The layoffs came only a few weeks after Carvana reported a $506 million loss in the first quarter, which was six times that of the previous year.
In addition, the corporation recently paid $2.2 billion for Adesa US’s used automobile auction business.
Carvana shares slumped 5.4 percent to $36.68 on Tuesday. So far this year, they are down 84 percent.