About 750 jobs are to go at online car seller Cazoo across the UK and Europe as it looks to cut costs by more than £200 million by the end of next year.
The US-listed British automotive supplier has said it plans to reduce its workforce by about 15 per cent and also slow down on hiring new staff under a major cost-savings drive.
It warned of recession fears and consumer cutbacks — an echo of Elon's Musk's “super bad” economy warning last week when the electric car mogul said he would cut 10 per cent of his Tesla workforce.
Cazoo did not give a breakdown of where the jobs will go, but the bulk will be across its 4,000-strong UK employee base and in Germany.
Jobs will also be cut across its European divisions in France, Spain and Italy, while it is also shutting some customer service and vehicle preparation sites in the UK.
The firm said it would shut two of its 10 vehicle preparation sites there and close one of its 21 customer support centres, with the site in Leeds set to go, alongside plans to cut back its centre in Southampton.
The London-headquartered group has about 5,000 staff in total.
It said the “business realignment” was needed to protect profits in the face of tougher economic times.
But it also comes as firms such as Cazoo have seen online car sales dwindle, with used car dealer Carzam collapsing late last week.
“The company is not immune to the rapid shift in the global economy and the possibility of a recession in the coming months,” Cazoo said in a statement.
“As a result, management's expectations for the full year are now more cautious, reflecting the weaker and uncertain external environment.”
Cazoo founder and chief executive Alex Chesterman said a combination of rising inflation and interest rates and supply chain issues caused by the coronavirus pandemic and war in Ukraine has driven up the cost of living and hit consumer confidence.
“This perfect storm has placed cash conservation top of mind for the company, ahead of growth,” he said.
Cazoo said it will also lower marketing spend and delay some planned investment projects, among other cost-cutting measures.
And the group said it will no longer offer its subscription service to new customers from the end of June.
Cazoo lowered its sales outlook for the year ahead in light of more difficult trading. It now expects to sell between 70,000 and 80,000 vehicles in the full year, down from previous guidance, but this would still be up to 130 per cent higher year-on-year.
Revenues of between £1.4 billion and £1.5bn are now expected for the year, and cash flow is likely to break even in the UK by the end of 2023.
The company was founded two-and-a-half years ago by prolific tech entrepreneur Mr Chesterman.
It was floated on the stock market in New York last August in a listing initially valuing it at about £5bn.
Cazoo offers online sales and delivery of used vehicles in the UK and continental Europe.
It has sold more than 70,000 cars since launch, making it one of the largest used car retailers in the UK, with revenue of more than £665m last year.