US-based e-commerce platform for used vehicles, Vroom, has announced the discontinuation of its e-commerce operations and the winding down of its used vehicle dealership business. The decision is aimed at preserving liquidity and maximizing stakeholder value through the remaining businesses.
As part of the plan, approximately 800 employees, which accounts for around 90% of the total workforce, are expected to be laid off. Vroom outlined this in a filing with the US Securities and Exchange Commission (SEC).
The Value Maximisation Plan, approved by Vroom’s Board of Directors, involves suspending transactions through vroom.com, selling the current used vehicle inventory through wholesale channels, and ceasing the purchase of additional vehicles. The company expects the plan to be substantially implemented by March 31, 2024.
Thomas Shortt, the Company’s Chief Executive Officer, stated, “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. Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market.”
Despite the e-commerce wind-down, the United Auto Credit Corporation (UACC), an automotive finance company, and CarStory, an artificial intelligence (AI)-powered analytics and digital services platform for automotive retail businesses, will continue to serve their third-party customers, with their operations remaining unaffected.
(With Agency Inputs)