If you were thinking about pulling the trigger on a used car through online retailer Vroom, we’ve got bad news: you missed your shot. The company announced today that it is suspending all transactions through vroom.com, and laying off around 90 percent of its staff.
In a release, the company said that it will wind down its used car sales department to maximize shareholder value through its other businesses. What remaining vehicle inventory it has left, it plans to sell through wholesale channels. Customers who have already signed a contract to buy or sell a vehicle should reach out to Vroom’s support team at (855)-524-1300.
“As we previously disclosed, we intended to raise additional capital to fund our operations and support the extension of our vehicle floorplan facility beyond its current expiration date of March 31, 2024,” said Thomas Shortt, Vroom’s CEO. “Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market. Obviously, we are very disappointed with this outcome.”
Read: Used Car Prices Drop Faster Than Expected, Now 21% Below 2021 Peak
In addition to suspending transactions on vroom.com and ceasing all new vehicle purchases, the company is also laying off around 800 employees, which constitutes approximately 90% of its workforce, excluding those engaged in UACC’s or CarStory’s operations.
Those remaining employees are associated with UACC (United Auto Credit Corporation), Vroom’s automotive finance company, and CarStory, which specializes in AI-powered analytics and digital services for automotive retail. Vroom intends to expand this segment of its business to cater to third-party customers.
“Although we were unable to raise the capital necessary to achieve profitability in our ecommerce operations, we are committed to responsibly managing our remaining businesses and prudently deploying our capital as we seek to maximize value for all of our stakeholders,” said Robert Mylod, independent executive chair of the board.
Times have been tough for online used car retailers, in general. Vroom’s fall from grace follows the decline of Shift Technologies Inc., another used vehicle seller that filed for Chapter 11 bankruptcy in October. Prices for second-hand vehicles have started to shrink slightly, after rising remarkably during the pandemic.
