Used-car retailer Carvana (CVNA) Co. is cutting 1,500 jobs, or 8% of its workforce, the company said on Friday, amid waning demand for used cars on the back of sky-high prices and supply shortages.
Demand for used cars has been negatively impacted by hybrid-working models and higher costs caused by rising interest rates, as consumers rethink personal mobility options to try and trim their daily expenses.
CNBC, which first reported the layoffs, cited an internal memo, that the company faced economic headwinds from higher financing costs and it “failed to accurately predict how this would all play out and the impact it would have on our business.”
Carvana, whose shares were down about 7% at noon, has missed expectations for adjusted earnings in the last five quarters, per Refinitiv data, as expenses soared and demand for used cars dipped.
The company, best known for its automated car vending machines, earlier this year laid off around 2,500 employees, or 12% of its workforce, in a bid to cut costs among its other measures.