The online car seller Cazoo announced it is cutting about 750 jobs across the UK and elsewhere in Europe, as it warned of recession and consumer cutbacks.
The British company, which opted to make its stock market debut in New York rather than London last year with a value of $7bn (£5.5bn), is looking to cut costs by more than £200m by the end of next year.
Cazoo has said it plans to slash its workforce by about 15% and slow the pace of hiring new staff under a major cost savings drive. It is understood the majority of the job losses will be across its UK operations – its biggest division – as well as at its European bases in Germany, France and Italy.
The group said the “business realignment” was needed to protect profits in the face of tougher economic times. Firms such as Cazoo have also seen online car sales dwindle as pandemic restrictions have been lifted, with the used-car dealer Carzam collapsing late last week.
Cazoo said: “The company is not immune to the rapid shift in the global economy and the possibility of a recession in the coming months. As a result, management’s expectations for the full year are now more cautious, reflecting the weaker and uncertain external environment.”
Alex Chesterman, who founded Cazoo in 2018 and is the company’s chief executive, said: “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.
“This perfect storm has placed cash conservation top of mind for the company, ahead of growth.”
Cazoo, which has been described as the Amazon of the used car market, promises to make buying or selling a car as easy as ordering other products online, where “consumers can simply and seamlessly buy, sell, finance or subscribe to a car entirely online for delivery or collection in as little as 72 hours”.
When it floated on the stock market, the company merged with a special-purpose acquisition company (Spac), Ajax I, led by the billionaire US investor Daniel Och, with growing numbers of companies taking advantage of the Spac trend. Spacs are “blank cheque” companies that have become an increasingly popular – and cheaper – way for a private company to go public.
