Round of Carvana layoffs include West Memphis jobs

Used vehicle company cuts 2,500 workers, citing economic downturn

ralphhardin@gmail.com Less than a year-and-a-half ago, Carvana cut the ribbon on a brend-new distribution facility in West Memphis, bringing scores of new jobs to the community.

Now, some of those employees find themselves out of a job, joining thousands of Carvana employees across the country who got news on Tuesday that they are being laid off, largely without notice.

Citing “macroeconomic factors, Carvan CEO Emie Garcia sent all Carvana employees an email explaining what the company was doing, what would be happening in the immediate and long term future, who will be impacted by the layoffs and what employeed could expect in the months to come.

In all, 2,500 people across the country were let go, including some in West Memphis — exactly how many locals were affected by the news has not been officially announced — who were in the middle of their regular Tuesday morning shifts at the yearold distribution center when the news came in.

In the email, Garcia said there were several reasons that led to so many people being laid off.

He said supply chain issues and inflation are putting the prices for cars at an alltime high, and these are all factors that are out of their control.

“It has become clear that the right thing to do for the long-term interests of Carvana is something that I believed — and something that I hoped — we would never have to do. We have to say goodbye to part of our team — to some of you — in order to get our team size back into alignment with sales.”

His message to the people who were terminated said in part, “First, I want to tell you I am sorry. I know that doesn’t go very far to change what this means for you and for your family.

Regardless, it is true and it needs to be said. I am extremely sorry. You put your faith in us and we let you down. I hope you can find it in you to forgive us.

I understand if you can’t.”

Carvana found its niche in the used car market through the unique “vending machine” style displays at its stores, seeing tremendous growth in its initial stages. As part of that growth, Carvana built a multimillion-dollar facility in West Memphis where vehicles the company acquired were prepared to be shipped out to its dealerships throughout the U.S., including one in Memphis.

Garcia outlined some of this in Tuesday’s email.

“We built Carvana to deliver better, simpler experiences to our customers by reimagining and building everything from the ground up,” he said. “Our success with this model has meant: 1) we have grown extremely fast, and 2) we have spent a lot of our time preparing for growth because building everything from the ground up is hard to do quickly.

Taking those facts together, it has always been the right move to start building for growth well ahead of when we expect it to show up.

This strategy worked for us every year until this one.

There is so much going on in the world today that I don’t want to pretend to have a full understanding, but it is an understatement to say a lot has changed about our environment.

Inflation and interest rates are up, supply chains are disrupted, and consumer and investor sentiment have shifted.

Garcia said the layoffs included roughly 12% of Carvana’s workforce, and that “the impact will be concentrated in our operational positions. I wish the burden were shared more evenly across the company, but our operations teams have grown the most over the last several months and are therefore furthest out of balance with the sales we are seeing. Garcia said for those laid off: • We will be providing everyone with 4 weeks of pay plus one week for every year you have been with us.

• We will be providing extended healthcare for everyone for 3 months.

• You will also get the benefit of your CarvanaShares and all shares associated with the 1 Million Car Milestone Gift.

• You will all be eligible for our Employee Vehicle Purchase Program for the next year.

• Through our People Ops team, we’re going to offer support and resources including resume review, linkedIn help, and tips to identify your next step in your career.

Garcia also said the “door will be open for rehire once we start growing again.”