Online used-car retailer Shift Technologies cut headcount by 30% in the first quarter as it sought to cut costs and eliminate redundant positions after its merger with CarLotz, said CEO Jeff Clementz. said in the report.
The layoffs came as the company saw its revenue plummet in the fourth quarter and operating losses widening.
Shift completed its merger with CarLotz in December, quickly eliminating overlapping costs and roles, Clementz said on Tuesday’s earnings call. In early February, the company decided to end his CarLotz presence on the East Coast and close his Grove location in Downer, Illinois, in order to focus on its core West Coast market. His one remaining CarLotz store in Pomona, California remains open. Shift also has three locations in Los Angeles, San Francisco, the Bay Area, and Portland.
“It’s been difficult, but we cut headcount by about 30% in the first quarter,” Clementz said by phone. “In addition to the corporate role, most of the reductions were due to the move to a decentralized sales organization in February,” he said. strategic moves are largely behind,” he added.
Shift Technologies, which went public in 2020 through a merger with a special-purpose acquisition company, reported fourth-quarter revenue of $65.6 million, down 67% from the same period last year. Shift reported an operating loss of $60.7 million in the fourth quarter. This is a 14% increase from the same period in 2021.
Shift reported a net profit of $13 million in the fourth quarter, compared to a net loss of $75.8 million in the same quarter of 2021. A lot of that, though, was due to his $76.7 million one-time gain from the CarLotz acquisition. His 2022 net loss for Shift was his $172 million, up from his $162.2 million loss reported the year before. Notably, the company’s gross profit per unit fell by 42% between 2021 and 2022 to $1,208 per vehicle.
Shares of Shift fell on the earnings report. The stock fell nearly 28% Wednesday to $1.21. But with the stock still trading above $1, the company was able to reclaim its listing requirements on the Nasdaq.
