As layoffs and cost cuts roil Wall Street, from retail and shipping to tech and media, embattled online used car sales giant Carvana (NYSE:CVNA) says its own restructuring is in the rear view.
Carvana over the last 18 months aggressively restructured its operations and debt amid bankruptcy concerns to pivot from growth to cost-cutting. They were crucial moves for the company and its largest shareholders, including CEO and Chairman Ernie Garcia III and his father, Ernie Garcia II. The two control 88% of Carvana through special voting shares.
The efforts thus far have been successful, propelling Carvana’s stock last year from less than $5 per share to more than $55 to begin 2024 – marking a significant turnaround for the company, but still a far cry from the stock’s all-time high of more than $370 per share reached during the coronavirus pandemic in 2021.
The Tempe, Arizona-based company has taken $1.1 billion of annualized expenses out of the business; reduced headcounts by more than 4,000 people; and launched a new proprietary “Carli” software platform for end-to-end processing of vehicle reconditioning as well as other “AI,” or machine learning, systems for pricing and sales. The systems replaced previous processes that involved manually inputting data into separate systems or spreadsheets.
CVNA shares began Friday trading lower 74 cents, or 1.7%, to $41.79.