On May 10, 2022, Tempe-based Carvan Co. announced it was laying off approximately 2,500 employees, amounting to approximately 10% of its staff.
According to the company’s filing with the United States Securities And Exchange Commission, “All impacted team members will have the opportunity to receive four weeks of pay plus an additional week for every year they have been with Carvana. Impacted team members will also have the opportunity to receive extended healthcare coverage, pay equal to early vesting of certain previously granted equity awards, recruiting and résumé support, and continuing participation in certain other company programs. The executive team is foregoing their salaries for the remainder of the year to help contribute to the severance pay for departing team members.”
At the same time the company. which got its start in the Valley, announced it was involved in the $2.2B acquisition of ADESA’s U.S. physical auction business, consisting of 56 ADESA U.S. locations.
“This alignment with ADESA U.S. will further strengthen our foundation for growth and provide us with significant flexibility to execute our plan through a wide range of macroeconomic scenarios,” says Ernie Garcia, Carvana founder and CEO. “Despite the recent industry slowdown, Carvana continues to grow and deliver exceptional experiences to an increasing number of customers. We aim to use this ADESA U.S. alignment to both improve the experiences of the ADESA U.S. physical auction customers and to focus on significant and sustainable efficiencies, and unit economic improvements, for Carvana to catapult back into rapid profitable growth as the industry inevitably rebounds.”
In connection with these right-sizing initiatives, over the next several weeks Carvana will be transitioning operations away from its Euclid, OH IRC and a few logistics hubs.