The online used car retailer Carvana has laid 1,500 people, about 8% of its total workforce, on Friday, a person familiar with the matter told The Washington Times.
“These reductions impact many corporate and technology teams as well as some operations teams where we are eliminating roles, locations or shifts to match our size with the current environment,” a person familiar with the matter explained to the Times.
The company’s leadership miscalculated the impact of inflation, rising interest rates and other factors affecting car purchases.
“We failed to accurately predict how this would all play out and the impact it would have on our business,” the source said.
The stock market continued to pummel Carvana, with its stocks falling 7% Friday, and with its overall position declining 97% from its peak of $376.83 per share on Aug. 10, 2021, according to CNBC.
Some experts argue that a COVID-19-fueled boom in online sales and the resulting windfall pushed Carvana to reach too far, too fast in terms of acquisitions. Carvana took on $3.3 billion in debt to acquire Adesa’s physical auction business, according to Barron’s.
“The company grew too fast and now we are seeing the ramifications of it,” John Kerschner, head of U.S. securitized products at asset management group Janus Henderson, told Bloomberg.
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