Online used car market Shift cuts workforce by 30% after merger with CarLotz
Online used-car dealership Shift Technologies reduced its workforce by 30% in the first quarter as the company sought to cut costs and eliminate duplicate jobs following its merger with CarLotz, CEO Jeff Clementz said during a conference call.
The layoffs came as the company’s fourth-quarter sales slumped and operating losses widened.
Shift completed its merger with CarLotz in December, immediately eliminating duplicate costs and roles, Clementz said during Tuesday’s conference call. In early February, the company decided to ditch CarLotz’s East Coast presence and close its Downer Grove, Illinois location to focus on its core West Coast markets. A remaining CarLotz location in Pomona, California will remain open. Shift also has three locations in Los Angeles, San Francisco Bay Area and Portland.
“While it was tough, we reduced headcount by about 30% in the first quarter,” Clementz said on the earnings call. “In addition to the company’s positions, most of the cuts were due to our move to a decentralized sales organization, which took place in February.” He added that “the CarLotz integration and strategic moves to adjust our SG&A are largely behind us.”
Shift Technologies, which went public in 2020 through a merger with a special purpose vehicle, said it had fourth-quarter revenue of $65.6 million, down 67% from the prior-year period. Shift reported an operating loss of $60.7 million in the fourth quarter, up 14% from the same period in 2021.
Shift reported net income of $13 million in the fourth quarter, compared to a net loss of $75.8 million in the same quarter of 2021. However, much of that was due to the non-recurring gain of $76.7 million from the takeover of CarLotz. Shift had a net loss of $172 million in 2022, up from a loss of $162.2 million in the prior year. Notably, the company’s gross profit per unit fell 42% to $1,208 per vehicle between 2021 and 2022.
The earnings report sent Shift stock down. The stock fell nearly 28% to $1.21 on Wednesday. However, the share price is still hovering above $1, which has allowed the company to regain a listing on the Nasdaq exchange.
https://techcrunch.com/2023/03/29/online-used-car-marketplace-shift-cuts-workforce-30-following-carlotz-merger/ Online used car market Shift cuts workforce by 30% after merger with CarLotz