Online car retailer Cazoo has announced it will cut 15 per cent of jobs to save more than £200m until the end of next year.
Under its business realignment plan, the company will axe 750 UK and EU positions, cutting vehicle preparation as well as customer support sites.
Cazoo’s focus will instead be driving its retail growth up 40 per cent year-on-year to achieve cashflow breakeven and provide the business with a “runway beyond 2023.”
According to chief financial officer Stephen Morana, the majority of sales will derive from the UK with “moderate EU numbers.”
The retailer added that from the end of June it will no longer offer its subscription service to new subscribers, as it is deemed “highly cash consumptive.”
Despite announcing last month that it remained laser-focused on long-term objectives, the car retailer said it wasn’t immune to “the rapid shift in the global economy” as well as the possibility of recession hitting the UK in the next few months, forcing it to to be more cautious with its full year expectations.
“We’re assuming none of this gets better and hence the actions we have taken over the last few weeks,” chief executive Alex Chesterman told analysts during a call.
The company said it was expecting its full year guidance for retail unit sales to be at 80,000 with revenues amounting to £1.5bn and growth per unit between £500 and £600.
“The combination of rising inflation and interest rates with supply chain issues caused by the pandemic and war has driven up the cost of living and hit consumer confidence,” Chesterman added.
“We have proven that we can buy and sell cars at scale and deliver a market-leading customer experience, but in the current climate we are focused on improving our unit economics which involves making some tough but necessary decisions around our priorities.”
Chesterman had previously argued that ongoing inflationary pressures would not impact the business.
“Used cars have historically [pushed] in a recessionary environment, while new cars tend to be much more affected,” he told analysts during a call on 7 April. [New cars] are a luxury purchase whereas used cars are functional.”