Online used car retailer Shift Technologies lower its workforce by 30% within the first quarter as the corporate sought to cut back prices and remove duplicate positions following its merger with CarLotz, CEO Jeff Clementz mentioned throughout an earnings name.
The layoffs got here as the corporate noticed its income plummet within the fourth quarter and its working losses increase.
Shift closed its merger with CarLotz in December and instantly eradicated duplicate prices and roles, Clementz mentioned throughout Tuesday’s earnings name. In early February, the corporate determined to exit CarLotz’s presence on the East Coast and shut down the Downer Grove, Illinois location with a purpose to concentrate on core West Coast markets. One remaining CarLotz location in Pomona, California stays open. Shift additionally has three places in Los Angeles, San Francisco Bay Area and Portland.
“While difficult, we reduced headcount by approximately 30% in the first quarter,” Clementz mentioned on the decision. “In addition to corporate roles, the majority of reductions were due to our move to decentralized sales organization, which occurred in February.” He added that the “CarLotz integration and strategic moves to rightsize our SG&A are largely behind us.”
Shift Technologies, which went public in 2020 through a merger with particular function acquisition firm, reported it generated $65.6 million in income within the fourth quarter, a 67% drop from the identical year-ago interval. Shift reported an working lack of $60.7 million within the fourth quarter, a 14% enhance from the identical interval in 2021.
Shift did report internet earnings of $13 million within the fourth quarter in comparison with a internet lack of $75.8 million in the identical quarter in 2021. However, a lot of that was as a result of one-time achieve of $76.7 million from its acquisition of CarLotz. Shift had a internet lack of $172 million in 2022, up from the $162.2 million loss it reported the 12 months prior. Notably, the corporate’s gross revenue per unit fell 42% between 2021 and 2022 to $1,208 per car.
The earnings report prompted Shift shares to fall. Share fell almost 28% on Wednesday to $1.21. However, the share value continues to be hovering above $1, which has allowed the corporate to regain the Nasdaq change itemizing requirement.