US-based online used-vehicle retailer Vroom has laid off 11 per cent of its workforce, or around 120 employees, across different departments and locations.
The job cut is part of an ‘organisational restructuring’ that Vroom has implemented as part of a review of ‘all aspects of the business’, the company said in a US Securities and Exchange Commission (SEC) filing.
According to Automotive News, the company has tied the employee reductions to its pursuit of executing a long-term, cost-cutting-focused business plan it shifted to last year.
“The decision to reduce staff this week, while difficult, is consistent with our commitment to our long-term roadmap and objectives for the year to prioritise unit economics and growth, improve our customer experience, reduce cost per unit and maximise liquidity,” the company was quoted as saying.
Moreover, as a result of the reduction in force, the company expects to incur approximately $2 million in cash charges, primarily severance, and to achieve approximately $15 million of annualised cash savings, according to an SEC filing.
Employees affected will receive severance packages and job placement assistance, and the company will continue to hire for critical positions.
Last month, the US-based online marketplace for buying and selling used cars Shift Technologies reduced its workforce by 30 per cent in the first quarter in an effort to cut costs and eliminate duplication following its merger with CarLotz.
During the earnings call, CEO Jeff Clementz announced the job cuts. The layoffs occur as the company saw its revenue decline in the fourth quarter and its operating loss increased, reports TechCrunch.