Vroom laying off 90% of workforce, shutting down used-vehicle platform
Vroom laying off 90% of workforce, shutting down used-vehicle platform
The company, which peaked at a valuation of over $8 billion in August 2020 but has seen its market cap fall to $75 million, said that it is discontinuing its e-commerce operations and winding down its used vehicle dealership business, resulting in the layoff of 800 employees
American used-vehicle company Vroom has announced that it is discontinuing its e-commerce operations and winding down its used vehicle dealership business. As part of a plan, the company anticipates that approximately 800 employees will be laid off, which is approximately 90% of the total workforce.
Vroom also owns and operates United Auto Credit Corporation (UACC), an automotive finance company, and CarStory, an AI-powered analytics and digital services for automotive retail. They will both remain active and continue to serve their third-party customers.
Under the Value Maximization Plan approved by Vroom’s Board of Directors, the company is suspending transactions through vroom.com, planning to sell its current used vehicle inventory through wholesale channels, and halting purchases of additional vehicles.
Vroom was established in 2013 by a pair of American entrepreneurs, but a year later Israelis Elie Wurtman and Allon Bloch took it over and turned the company from a used car trading business to an online platform dealing with the purchase, repair, and sale of vehicles.
Vroom went public in 2020 at a valuation of $2.5 billion. It hit a record $8.1 billion valuation in August of that year, but had a market cap of just $75 million at the end of trading on Monday.
According to its reports, in the third quarter of last year, Vroom recorded a net loss of $83 million and carried out 4,561 used car sales transactions - a 29% decrease compared to the corresponding quarter in 2022.
