Carvana Lays Off 2,500 Jobs; Informs Workers Through Zoom Call

Online car retailer Carvana Co. (CVNA) said that it is cutting 2,500 jobs and informed certain workers of the layoffs via Zoom. The company also sent an email to workers from CEO Ernie Garcia III, which mentioned that most of the cuts would be in the company’s operations division.

Carvana, blamed a “recession” in auto sales, as the reason behind the job cut. The company shares plunged $6.66, or 18 percent, to $30 on Wednesday. The company’s stock has tumbled 87 percent since the start of the year amid its slowing growth and a spike in vehicle prices.

The move to inform about the layoffs through Zoom received a lot of backlashes from social media and those people who were laid off. Many criticized the company for depending on Zoom and email to inform workers that they were losing their jobs.
Two workers who lost their jobs in the layoffs told the media that they did not hear anything directly from managers at Carvana. Instead, they were informed first via Garcia’s email on Tuesday morning, and then a short time later lost access to the company’s corporate network, including email and Slack.

They received texts telling them to attend a Zoom meeting later that morning, where the job cut was announced. Talking about his experience, one of the laid off workers, Jay Romero from Phoenix, said, “I had no support from anybody — no management, no team leads. One of Carvana’s slogans is ‘Treat customers as you would treat your own mom,’ and we didn’t get treated that way as employees.”

Garcia said that the workers losing their jobs will receive four weeks of pay as well as one week for every year of service with the company. In a regulatory filing, the company also said that its executive team is go with salaries for the rest of the year to help fund severance pay for the workers.

In an email to the media, Carvana said it had “as many conversations as we could in person, and where in-person was not possible, we spoke to our team members over Zoom.” The spokesperson added, “Not all of the conversations were through Zoom.”
The layoffs come just a few weeks after Carvana posted a $506 million loss in the first quarter, six times larger than the same period a year ago. The company also recently acquired Adesa U.S.’s used vehicle auction business for a cost of $2.2 billion.

The incident reminds one of another incident late last year when real estate company asked 900 employees to attend a Zoom call before the holidays. But rather than offering an end-of-year message to workers, CEO Vishal Garg informed attendees they were being fired. Garg’s mass dismissal sparked outrage, with people calling the mass video layoff “crass” and criticizing its timing around the holidays.

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