Carvana cuts 1,500 jobs as demand for used cars declines

Photo: Joe Raedle (Getty Images)

carvana is laying off 1,500 workers, who make up about 8% of its current workforce due to lower demand for Used vehiclesaccording Reuters. These latest job cuts come after a crushing “downsizing” of 2,500 workers dating from May of this year.

In total, the online used car retailer has now lost at least 4,000 workers in less than a year, proving that boom and bust cycles in the used car market in the United States are changing at a breakneck pace. Despite the difficulty many buyers still face in finding used cars – or perhaps because of it – the used car market is waning, and major used auto retailers seem having overestimated the enduring power of recent increases in used car demand. Or at the very least, they seemed to have overestimated buyers’ willingness to take on higher financing costs.

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The average APR for car loans through industry made its way, and Reuters suggests that hybrid working models (in which workers can choose to commute to work less often, and are therefore likely to be less dependent on private transport) have negatively affected the used car market, especially as people rethink their budget to save money where possible.

A CNBC announcement confirms that Carvana executives did not expect the steady decline in used car demand to affect the company:

Why this would be the case is anybody’s guess. If Carvana had recently been hit by the downturn in used car buying to the point of laying off 2,500 workers – who at the time made up 12% of the retailer’s workforce – it stands to reason that a Continued downward trend would likely affect the business in the near future. And that trend wouldn’t have been hard to miss: As CNBC notes, Carvana shares are currently worth 90% less than they were last year.

Carvana has been bleeding profits and workers for months now, and on the face of it, it’s not going to stop anytime soon. The layoffs are part of Carvana’s latest efforts to cut costs, but unless people start buying used cars in droves again, it looks like the used-car retailer and its employees could face some serious challenges. hard times.

Photo: Joe Raedle (Getty Images)

Photo: Joe Raedle (Getty Images)

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