Carvana will "
" 1,500 workers.
Carvana, an online used-car retailer,
announced plans to lay off 1,500 employees, or 8% of its workforce
, citing economic headwinds and higher financial costs.
stock price of the company
has dropped 97% in the last year. Carvana's business has been harmed by persistent inflation, rising interest rates, and the
threat of a recession
“Today is a difficult day. The world around us has continued to get tougher and to do what is best for the business, we have to make some painful choices to adapt”.
, CEO of Carvana, said
Rising borrowing costs and worries about a looming recession have dampened demand for used cars,
leading to falling prices
After reaching historic highs in 2021, used vehicle prices fell for the fifth consecutive month in October.
According to the
Manheim Used Vehicle Value Index
Garcia said, “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.”
These layoffs would be
in addition to the 2,500 announced by Carvana in May
Many technology companies have struggled in the year since the pandemic's peak.
Meta Platform Inc., Facebook's parent company,
laid off 13% of its employees earlier this month
, while Amazon announced plans to
lay off 10,000 workers this week
According to the company, fired Carvana employees will receive
separation and severance pay, extended healthcare coverage for three months, and other benefits
Following the announcement of the layoffs, Carvana stock fell 6.2% to $7.80 on Friday. The stock has dropped 97% in the last year, far outpacing the S&P 500 Index's 17% decline.