Carvana entered the year with vast expansion plans, including a commitment to grow in Dunwoody.
Bolstered by spiking used-car demand amid the COVID-19 pandemic, the online pre-owned car dealer announced in February it would sublease a 21-story building at the State Farm complex and grow its Georgia workforce by as many as 3,500 new employees.
Instead, 2022 has seen Carvana shed thousands of workers as analysts question the company’s long-term future.
Carvana announced Friday it would cut roughly 1,500 jobs nationwide, which is about 8% of its workforce. The layoffs come about six months after the company laid off 2,500 employees, at the time roughly 10% of its staff. According to multiple news reports, the reasons for both layoffs were the current unstable economy, featuring rising interest rates, inflation and fears of a recession.
Car sales are down overall this year as interest rates have made borrowing more expensive and as consumers gird for a potential economic downturn.
Carvana said job cuts will affect its corporate, technology and operations teams.
“We don’t have any specifics to share on local impact and no new updates to share on our expansion,” a company spokesperson told The Atlanta Journal-Constitution on Tuesday. The company told the AJC in September that the “expansion plans announced earlier this year are still underway.”
Carvana, which is based in Arizona, first came to Atlanta in January 2013 at a used car show the High Museum of Art and now operates several logistics hubs and an inspection center in Georgia. It opened a 12-story Car Vending Machine, the tallest in the U.S., in November 2020 in Midtown along the Downtown Connector.
The company entered 2022 with roughly 1,500 Georgia employees, Gov. Brian Kemp’s office said in the news release announcing Carvana’s planned expansion.
Carvana did not say whether any of its layoffs affected Georgia workers. According to LinkedIn posts first reported by the Atlanta Business Chronicle, at least four employees in the metro Atlanta area claimed they lost their jobs Friday. It’s unclear how many Carvana employees occupy the newly leased Dunwoody office building, a 569,000-square-foot tower at 236 Perimeter Center Parkway.
Carvana’s stock, which peaked at more than $360 per share in mid-2021, plummeted to less than $7 a share Tuesday, a decrease of about 98%.
Following a disappointing third quarter earnings report earlier this month, S&P Global Ratings downgraded Carvana’s outlook to negative from stable. Carvana is also forecast to run out of reserved funds by the end of next year, given quarterly losses. Since the company went public in 2017, it has generated net income in just one quarter.
A Carvana spokesperson told Bloomberg News that the company has $2.3 billion available to it between cash and credit lines in addition to another $2.1 billion of additional liquidity resources. In addition, Carvana continued to gain market share in the third quarter.
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