Carvana cuts 2,500 jobs and executives refrain from paying severance pay

Detroit (AP) — Online car retailer Carvana Co. says it will fire about 2,500 workers (about 12% of its employees) to match its workforce and expenses to sales.

The Phoenix company said in a regulatory filing Tuesday that its executive team was giving up the rest of the year’s salary to help fund workers’ severance pay.

Carvana, who sells online and delivers used cars to buyers, says the dismissed workers come from the governing group. According to the company, it plans to “migrate” from an automated repair center near Cleveland in Euclid, Ohio, and some logistics hubs.

Filing said the move was difficult, but “it will make it easier for Carvana to return to efficient growth in its mission to change the way people buy and sell cars.”

Layoffs are six times higher than in the year-ago quarter, just weeks after Carvana lost $ 506 million in the first quarter.

The company recently acquired Adesa US’s used car auction business for $ 2.2 billion.

Carbana shares fell 5.4% to $ 36.68 on Tuesday. So far this year it has decreased by 84%.