On Tuesday, Carvana which is an internet-based used vehicle dealer, sacked 2500 employees on Zoom, as confirmed by the company on the company’s website.
“You just fired us from an online meeting and then said “have a great day” at the end of the meeting,” one user on Twitter wrote. “I am so disappointed by how this was dealt with.”
Another user wrote an email sent before the Zoom call that created “mass excitement at 7:15 a.m.” It failed to specify the employees who would suffer from the cutbacks.
Rumours circulated on social media circulated that the Zoom was recorded in advance. However, Carvana said to Protocol that this was not the scenario. The laid-off workers typically work in “operational posts,” comprising about 12 per cent of Carvana’s workforce. A letter to employees from the CEO Ernie Garcia reportedly blamed the slower than expected growth.
Carvana is struggling to keep its early-pandemic growth and had an operating loss of $260 million during the first quarter of this year. Its stock price has fallen by more than 84% from the beginning of the calendar year.
“Recent macroeconomic issues have sent automotive retail sector in recession,” the Carvana spokesperson said to Protocol. “While Carvana is still growing, we are experiencing slower growth than the plan we initially formulated for 2022. In addition, we took the difficult choice to shrink the size of specific teams to better align with the demands of our business.”
A Carvana spokesperson informed Protocol that “less than half” of the layoffs were made via Zoom and that they “had as many discussions as possible personally.” The spokesperson could not disclose how many layoffs were carried out via Zoom and how many were conducted in person. However, the spokesperson did not deny that the layoffs of 2,500 employees took place through Zoom.
Carvana’s executives are sacrificing their salary for the remainder of the year to pay laid-off employees the severance pay, as per an 8-K report the company has filed in the Securities and Exchange Commission.
On the same day, Carvana announced that it would invest $2.2 billion to acquire the Adesa business, which includes auction sites for cars in the form of KAR Auction Services. The Wall Street Journal said that although Garcia hopes that the deal will aid in helping “catapult” Carvana back to growth, the company had to face several challenges in financing the deal.
Some companies have received bad media attention after massive layoffs on video platforms, such as TripActions, the layoff of Zoom in 2020, and Better.com’s webinar layoff at the end of last year. There’s more likely to be revealed, given how the employment market is changing, and both Cameo and Mural have announced layoffs in recent months, and Netflix, Meta, Uber, and Robinhood have all cut back on hiring.