Laid off while on medical leave. Mass discharges via Zoom. Drive-thru equipment returns. The Copper Courier spoke with several former employees about Carvana’s recent employee purge.
Tempe-based used-car seller Carvana laid off 2,500 employees, about 12% of its workforce, in May. The company cited a decrease in automobile sales as its reason for cutting back on staff.
Nicole King of Phoenix said she had worked for the company for about two and a half years when she found out she was laid off while on medical leave.
While recovering from knee surgery, King said she received an email about her severance, with no prior notification from her manager or anyone else at the company.
King, whose title was senior advocate for the executive resolution team, said it wasn’t until 40 minutes to an hour after she received that email that she received a phone call from a Carvana employee she didn’t know, telling her she was let go.
Another former employee who asked to withhold her name said the day before the layoff, she received a text telling her her team would be working from home the next day. She said she thought it may have had to do with traffic from Arizona State University graduations and asked her team lead if that was the case, but didn’t receive a response.
Early the next day, she received a mass email announcing the layoff. About two hours later, she said, her manager sent her a Zoom invite and she hopped on a meeting with him. He informed her the company was parting ways with her, she said.
Unlike her, many employees found out they lost their jobs via mass Zoom calls.
“I did have that personal meeting with my own manager, but a lot of other people didn’t have that luxury,” the anonymous employee said. “It was really quick. I couldn’t really ask her any questions. I just had to log out, and that was it. That was my day.”
Carvana spokeswoman Veronica Cardenas said the company did its best to “aim for clear, timely, compassionate communication.”
“With those goals in mind, we had as many conversations as we could in person, and where in-person was not possible, we spoke to our team members over [Z]oom,” Cardenas wrote in an email to The Copper Courier.
Carvana’s severance packages offered four weeks of pay, plus one extra week of pay for every year the employee had been there.
The company’s executive team agreed to forgo their salaries through the end of the year to pay for this severance.
On the executives giving up their salaries, King said, “I just rolled my eyes. They make millions of dollars. It’s not going to affect them at all. Unfortunately for people like me in my position whose living is paycheck to paycheck, I have to figure out how I’m going to put food on the table and keep a roof over my head.”
Carvana CEO Ernie Garcia III is Arizona’s second-richest man, with a net worth of $3.2 billion. His father, Ernie Garcia II and Carvana’s largest shareholder, is the state’s richest man with a net worth of $8.6 billion.
“Him and his dad, they have their own stocks so they’re not worried,” the anonymous former employee said. “Their salary that they’re forgoing doesn’t mean anything.”
The former workers also noted the company’s pricey acquisition of a used vehicle auction business, a sale that was finalized the same day the layoffs were announced.
“They made an announcement that they bought a $2.2 billion company, literally within 40 minutes of letting us all go,” King said.
Carvana said its layoffs were a result of “recent macroeconomic factors” pushing vehicle sales into a “recession.”
“While Carvana is still growing, our growth is slower than what we originally prepared for in 2022, and we made the difficult decision to reduce the size of certain operations teams to better align with the current needs of the business,” the company said in a statement.
A Change in Atmosphere
The anonymous former employee said things were good when she first started at the company, and she felt she was being paid fairly, but things shifted as Carvana grew.
“Then all of a sudden they have so much money and they have all this stock and the company’s doing great, but we can barely scrape by,” she said. “We’re talking in the office about how we can’t afford lunch as we’re working.”
This new environment was one in which laid-off employees were asked to return their tech equipment through a drive-thru at a company building.
“It was really weird to basically be in a drive-through to drop off my stuff and it was like a walk of shame, too,” the anonymous former employee said.
King said she missed the time for the drive-thru and was able to catch someone to help her return her equipment, but she saw the arrows in place for it.
She said she also enjoyed her time at Carvana for most of her tenure there, up until she felt that shift in the culture.
“I’m not trying to bash the company. Do I think that the way that they went about this was really shady and made them look sus? Yeah, absolutely. 100% I think that. And I personally won’t be supporting them any longer, but they were a good company to work for when I was there originally to start,” she said. “They were a great company, and it just seems like the environment changed.”