Carvana cuts 2,500 jobs and executives waive severance pay | Radio WGN 720

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DETROIT (AP) — Online auto retailer Carvana Co. said it was laying off about 2,500 workers, or about 12% of its workforce, as it tried to align headcount and spending with sales.

The Phoenix company said in a regulatory filing on Tuesday that its management team is waiving salaries for the remainder of the year to help fund workers’ severance packages.

Carvana, which sells and delivers used vehicles online to buyers, says the laid-off workers will come from operational groups. The company says it will conduct “transition operations” away from its auto reconditioning center in Euclid, Ohio, near Cleveland, as well as some logistics centers.

The filing says the moves are tough, but “will make it easier for Carvana to return to effective growth as part of its mission to change the way people buy and sell cars.”

The layoffs come just weeks after Carvana posted a first-quarter loss of $506 million, six times larger than the same period a year ago.

The company also recently acquired the used vehicle auction business of Adesa US for $2.2 billion.

Carvana shares fell 5.4% on Tuesday to $36.68. They are down 84% since the start of the year.

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