05/12/2022

Carvana to lay off 1,500 employees following stock freefall

A Carvana used car “vending machine” on May 11, 2022 in Miami, Florida.

Joe Raedle | Getty Images

Carvana plans to lay off about 1,500 people, or 8% of its workforce, following a freefall in the company’s stock and concerns around its long-term trajectory, according to an internal message obtained by CNBC’s Scott Wapner.

The letter from Carvana CEO Ernie Garcia cites economic headwinds including higher financing costs and delayed car purchasing. He says the company “failed to accurately predict how this would all play out and the impact it would have on our business.”

The lay offs add to a growing number of tech-focused job cuts amid rising interest rates, inflation and fears of an economic downturn. For Carvana, it also follows some missteps during the coronavirus pandemic to better capitalize on an unprecedently strong used-vehicle market during the coronavirus pandemic.

Shares of the company were down 7% by midday trading Friday.

Carvana did not immediately respond for request for comment.

This is developing news. Check back for additional updates.

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