Carvana Fires Employees Over Zoom Call as the Company Sinks to New Lows

 

Carvana vending station

Carvana - the car company known to many as the company that sells cars from a vending machine - has reached new lows, in more ways than one.

Carvana Fired 2500 Employees over Zoom

CBS News has reported that Carvana has fired 2,500 mostly operation division employees over a Zoom call. In addition to the firings, many executives had their pay suspended after the company reported lost $506 million in the first quarter of 2022. (Automotive News).

Is the U.S. Economy to Blame?

Carvana has blamed their failing business to a "car recession" in the United States. Economically speaking, rising interest rates in the U.S. and higher gas prices have negatively impacted Carvana's car sales in the first quarter of 2022.

CEO Ernie Garcia III says that the laid off employees will receive four weeks of pay plus one additional week of pay for each year they have been with the company.

One of Carvana's employee Jay Romero said that one of Carvana's internal slogans is: "Treat customers as you would treat your own Mom," however after being laid off in a very shady manner, he definitely did not feel that Carvana was treating him with respect. He shared that he felt his employment was a "scary experience" with "little to no support from anybody, from team leads or management."

A Disrespectful Carvana Layoff via Zoom

His layoff took place shortly after receiving an email about companywide layoffs from CEO Ernie Garcia. He was not fired by his direct managers. Rather, he started losing access to company systems, his email and Slack. He then received a text to participate in a Zoom meeting later that morning. In the Zoom meeting, a woman informed him that his job was cut. 

Carvana Stock Surged May 12, 2022

Despite the layoff news and gloomy outlook in the near future for Carvana, the stock price surges several times on Thursday, May 12, even requiring the stock market to halt trading several times. In this same trading day, the stock price had reached a two-year low, before surging 24%. This was reported by CNBC. 

Barron's has even compared Carvana to meme stocks, such as AMC and Gamestop.

Sources:

Lenihan, Rob. "Carvana, the 'Amazon of Car dealers', is in Deep Trouble." The Street. 17 May 2022.

Miao, Hannah. "Heavily shorted online used car seller Carvana surges nearly 25%, is halted several times." CNBC. 13 May 2022.

Moore, C.J. "Carvana, Vroom and Shift see stock prices, fortunes fall" Automotive News. 13 May 2022.

Picchi, Aimee. "Carvana fires 2,500 workers, some via Zoom: 'It was so disrespectful.'" CBS News. 12 May 2022.