Online car retailer Cazoo cited rising inflation and interest rates and supply chain issues on Tuesday as it said it was slashing 15% of its workforce as part of a £200m cost-cutting programme.
As part of the plans, Cazoo expects to cut around 750 roles across the business, and slow the pace of new hiring. It will also lower its brand marketing spend and focus more on performance marketing.
The firm will limit its capital expenditure and delay a number of planned investment projects. In addition, it will no longer be offering its subscription service to new subscribers from the end of June, “given the highly cash consumptive nature of this business model”.
Founder and chief executive Alex Chesterman 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.
“We have proven that we can buy and sell cars at scale and deliver a market-leading customer experience, but in the current climate we are focused on improving our unit economics which involves making some tough but necessary decisions around our priorities.”
Cazoo also provided a brief business update. During the period from 1 April to the end of May, retail unit sales were over 10,900, up over 80% year-on-year despite a “very tough macroeconomic backdrop”, it said.
