Carvana lays off 2500 employees and buys car auction company on the same day
Carvana reportedly laid off the employees on a video call.

Image depicting a carvana building
Carvana lays off 2,500 employees over a video call.
Source : Wall Street Journal

On Tuesday, May 10, online used car retailer Carvana laid off about 2,500 of its workers. It fired 12% of its workforce over a video call on the platform Zoom this week. One of the first ones to report on the lay off by the retailer was Protocol.

Reports from Twitter Inc specify how the firm gave rise to ‘mass hysteria’ among the affected employees. The startup sent an email to the entire company at 7:30 in morning informing them of the possible laying off. However, the car retailer did not specify exactly who all would have to bear the brunt of it. Finally, Carvana informed roughly 2,500 employees that they would no longer have their jobs at the firm on the Zoom video call. In fact, many of the employees, some being in operational positions, mentioned how they received the message in the form of pre-recorded video. The company, however, disputes this particular claim.

In a particular filing with the US Securities and Exchange Commission, Carvana referred to this step as a “right-sizing” initiative.

A tweet from a user expressing concerns over the move:

Carvana has seen its share of struggles recently in spite of emerging successful during the early stages of the pandemic. At the time of its first-quarter earnings call, it reported a net loss of $260 million, blaming the job cuts on the incoming monetary losses it had to face. A spokesperson from the company stated how factors pertaining to the ‘recent macroeconomic’ conditions have placed ‘automative retail into recession.’

While Carvana is still growing, our growth is slower than what we originally prepared for in 2022, and we made the difficult decision to reduce the size of certain operations teams to better align with the current needs of the business.”

Crucially, Carvana made the announcement of its expenditure of $2.2 billion for the purchase a number of auction sites for used cars from Kar Auction Services. Moreover, this was on the same day they let the workers know about the sudden job cuts. They specified that they would go ahead to purchase vehicle wholesaler Adesa U.S., which handles the functioning of 56 auction locations across the United States.

What is noteworthy is that Carvana is not only company to use a Zoom video call for a mass layoff. Towards the end of 2021, mortgage startup announced job cuts of around 10% of its employees in a similar webinar. This clearly led to an identical backlash from the ones who were affected by it.