Vroom is cutting 337 employees from its payroll all because it sold far fewer vehicles in the second quarter of 2022, according to Automotive News. It’s part of a business realignment strategy the company announced back in May. The moves are partially aimed at reducing expenses.
The online used-vehicle retailer also said it closed offices in New York City and Detroit. On top of that, it shuttered several used-car buying centers in Texas as part of the same plan.
The company reported a second-quarter net loss of $115.1 million. Believe it or not, that’s an improvement over Vroom’s first quarter losses of $310.5 million. However, that second-quarter loss is far larger than the $65.8 million loss the company suffered during the same time last year.
It cut operating expenses by $35 million during the second quarter – ending it with about $533 million in cash on hand.
Vroom also reports that revenue dropped 38 percent to $475.4 million in the second quarter. That includes a 45 percent drop in e-commerce revenue compared to the first quarter of 2022.
The company sold just 9,233 vehicles – that’s down about half. However, the profitability of those cars was up because of the current used car market. Vroom made a record average of $3,629 per vehicle sold.
Automotive News reports this was previously part of Vroom’s plan – to cut vehicle sales and focus on increasing gross profits per vehicle.
“We are making progress in reducing our cost structure as detailed in our business realignment plan presented in May,” Bob Krakowiak, vroom CFO, said in a statement.
Vroom’s chief online used car retailer competitor, Carvana, also hemorrhaged money during the second quarter of 2022. That company lost $439 million, which makes Vroom’s losses look a lot more palatable. Vroom.