Emerson Phillips
In one of the worst karma moves of all time, Arizona-based car company Carvana laid off 12% of its employees – and notified them via email – on the same day the company announced it spent $2.2 billion to buy an auction business.
All before lunchtime, in fact.
“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,” said Ernest Garcia II, Carvana CEO and the second-largest shareholder in the company.
In a weak attempt to cover their asses, Carvana company executives are giving up salaries for the rest of the year to help fund severance pay for the laid off workers This according to a regulatory filing made by the company Tuesday.
The 2,500 employees being laid off by the online automotive retailer will receive four weeks of pay plus one week for every year they have been with the company, the email read. The company will also be providing extended healthcare for three months, among other severance points.
“We aim to carry out this difficult decision in a transparent and thoughtful manner while providing meaningful assistance, resources and support to impacted team members,” a Carvana spokesperson said speciously.
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The layoffs come just a few weeks after Carvana posted a $506 million loss in the first quarter, six times larger than the same period a year ago.
The company also recently acquired Adesa U.S.’s used vehicle auction business for $2.2 billion.
Carvana shares fell 5.4% Tuesday to $36.68. They are down 84% so far this year.
We’d be remiss if we didn’t point out a few facts about the Carvana CEO. Ernest’s daddy is the wealthiest man in Arizona. Ernest pled guilty to a felony bank fraud charge for his role in the Lincoln Savings and Loan Association collapse in 1990. Ernest served three years on probation, and he and his firm filed for bankruptcy. His net worth is reported at $7.2 billion.
Food for thought next time you’re considering an online automobile purchase and where to spend your money.
