Business: Used car retailer Carvana to lay off nearly 12% of workforce

Carvana has missed expectations for earnings in the last three quarters as expenses soared and demand for used cars slipped due to sky high prices and inventory shortages.

Carvana Co would lay off around 2,500 employees, or 12% of its labor force, the company said on Tuesday, as the online used-car retailer works to return to profitability a long time after it detailed dismal outcomes. Shares of the organization, most popular for its automated car vending machines, pared losses to exchange down 1% at $38.43 in afternoon trade. They have lost over 50% since bringing $1.25 billion up in an equity offering last month.

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The company, in a securities filing on Tuesday, said it plans to move operations away from its inspection center in Euclid, Ohio and a few logistics hubs. (https://bit.ly/3ysMdKf)

The move will result in Carvana restoring a better balance between its sales volumes and staffing levels, it added.

Tempe, Arizona-based Carvana had over 21,000 full-time and part-time employees at the end of Dec. 31, as per its latest annual filing.

Carvana on Tuesday said all impacted team members, primarily in operational groups, would receive four weeks of pay and an additional week for every year that they have been with the company.

The company also said that its executive team would forego their salaries for the remainder of the year.

Carvana earlier on Tuesday closed a deal to acquire Carmel-based KAR Global’s U.S. physical auto auction business, ADESA, for $2.2 billion.

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