Carvana Layoffs 2022: What to Know About the Latest CVNA Job Cuts


  • Carvana (CVNA) is under pressure on Friday as a new round of layoffs weighs on CVNA stock.
  • The company will cut roughly 1,500 jobs or about 8% of its workforce amid sluggish demand.
  • Shares are now down more than 95% from Carvana’s 52-week high.
Carvana (CVNA) automobile dealership vending machine. Carvana is an online-only used car dealer.
Source: Ken Wolter /

Carvana (NYSE:CVNA) stock is crashing into the weekend, down more than 7% so far on Friday. Specifically, Carvana layoffs are weighing on CVNA stock, with investors continuing to hit the exits.

Sometimes a stock rallies when a company cuts its workforce, as job cuts can be a boost to the bottom line. That is sort of the point here, but the reasoning is not as promising for Carvana. Reportedly, the company is cutting roughly 8% of its workforce due to pressures on its business.

In a memo to staff today, Carvana announced that it would cut about 1,500 jobs. That’s as the economic environment continues to change and demand slows. For investors, “slowing demand” is likely the culprit behind the selloff in CVNA stock.

If Carvana was simply cutting jobs to boost margins while maintaining a similar top-line profile, CVNA stock would likely be rallying 7% today. However, CEO Ernie Garcia said the following about how current economic conditions are impacting the company:

“We failed to accurately predict how this would all play out and the impact it would have on our business.”

It Has Been a Tough Year for CVNA Stock

This is Carvana’s second major staff reduction in the last six months. However, it can’t be a surprise given the waning momentum in its business. That has been reflected in the stock price, too.

Both from the highs and year-to-date (YTD), CVNA stock is down more than 95%. Obviously, a bear market doesn’t help matters. But it’s really the lack of momentum in its business hurting Carvana.

On Nov. 4, CVNA stock sank more than 38% after the company significantly missed on earnings and revenue expectations. Worse, it generated a significant loss as well. Over a two-day span, shares fell almost 50%.

Analysts expect Carvana to lose roughly $10 per share this year and more than $7 per share in 2023. With the stock trading for less than $10 now, that’s a big problem. One analyst even set a 10 cent price target for their bear-case assessment following the report. As Reuters recently wrote:

“The weak demand has forced Carvana to sell many used cars at lower prices after having acquired them at a higher cost due to strong demand for personal transportation.”

That’s quite true as the used car market cools considerably.

As it stands, there’s nothing overly attractive about CVNA stock at the moment. The layoffs clearly explain today’s decline.

On the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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