Just days after Carzam went under, the highest profile online used car pioneer, Cazoo, announced that around 750 people in its workforce will be losing their jobs in a bid to cut costs.
We have previously reported that Cazoo’s share price has plummeted spectacularly by over 80% since its high profile NYSE listing and now it has to save £millions to move forward.
Plans announced this week include:
1. Lower selling, general and admin (SG&A) costs per unit while minimising the impact on growth
2. Achieve UK breakeven at lower retail unit sales with stronger focus on GPU and working capital
3. Manage costs and expenditure to become self-funding in the UK without needing further capital
Actions being undertaken to lower costs and drive operational efficiencies:
* Reducing existing employee headcount by c.15% and slowing the pace of new hiring
* Lowering our brand marketing spend and focusing more on performance marketing
* Limiting our capital expenditure and delaying a number of planned investment projects
* Rationalising our vehicle preparation and customer support sites to drive more efficiency
* Increasing focus on driving GPU growth through more efficient buying and reconditioning
* Modifying our consumer proposition to drive costs down and improve operating efficiencies
* Increasing procurement efficiencies across our entire supply chain to reduce overhead costs
* Slowing our near-term growth aspirations in both the UK and EU to focus on profitable growth
The enigmatic founder Alex Chesterman said: ‘I am very proud of the incredible team and business we have built so far.
‘The opportunity ahead of us remains as exciting as ever and we continue to see record sales levels, despite the challenging economic environment.
‘However, we need to be laser-focused with our drive towards profitability and preservation of capital.
‘We currently have a very strong balance sheet with over £400m of cash and over £200m of self-financed inventory, and we believe that our business realignment plan will ensure that we are well-positioned to achieve our long-term targets and capture the enormous market opportunity.
‘The size of the prize is huge, and I have no doubt that our business will be stronger as a result of the actions we are taking now, that we will continue to grow at a fast pace and will win.’