European online car retailer Cazoo Group Ltd said on Tuesday it would cut its workforce by about 15% as it looks to conserve cash amid rising inflation and interest rates as well as supply-chain issues.
Chief Executive Alex Chesterman called it a “perfect storm” for the company, which also announced a slowdown in hiring among other measures to maintain liquidity.
The job cuts will impact about 750 roles in the company, which employs more than 3,500 people across the UK, Germany, France and Portugal. Cazoo shares rose about 2.3% to $1.3 in a low-volume trade.
The plan is expected to extend its cash runway beyond 2023 and reduce risks to its profitability, the company said, as decades-high inflation and rising interest rates trigger fears of economic slowdown globally.
Last month, U.S. used-car retailer Carvana said it would lay off about 2,500 employees, or 12% of its workforce, and cut its marketing spend and capital expenditure.
While aiming to save cash, Cazoo said it expects sales to double to 70,000-80,000 units in 2022 from a year earlier and forecast annual revenue of between 1.4 billion pounds ($1.75 billion) to 1.5 billion pounds, two times higher than a year ago.
As part of its realignment plan, Cazoo said it will no longer offer its subscription service to new subscribers from the end of June, given the highly cash consumptive nature of the business model.
($1 = 0.7992 pounds)
(Reporting by Aishwarya Nair in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)