Alex Chesterman, founder and CEO of used car marketplace Cazoo, is stepping down as CEO from April. The company also anticipates more layoffs this year.
The news was announced in the listed company’s latest report, released on Wednesday. Paul Whitehead, currently COO at the UK-based one-time unicorn, will take over the CEO role, while Chesterman will move into a new position as full-time executive chairman.
It’s the latest in a string of big changes for Cazoo. In September 2022, the company announced that it would pull out of the EU and continue to operate solely in the UK. In 2022, it laid off 1,500 employees.
Since listing on the New York Stock Exchange (NYSE) in August 2021, Cazoo’s share price has dropped 97%. Its market cap is currently $234m — a fraction of the $7bn it was valued at when it floated.
In 2022, Cazoo reported UK revenues of £1.25bn. The company sold 65k cars in 2022 — but is anticipating lower retail volumes next year of 40k to 50k units.
Like many big tech companies, it needs to demonstrate to its investors that it’s on a path to profitability.
“We remain, however, extremely mindful of the current economic environment and believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway,” Chesterman said in a statement.
Part of that will involve “further headcount reductions” as some vehicle preparation centres and customer care centres are closed.
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Cazoo will also undertake a "share consolidation exercise" — which has been approved by its board.
Its shares are currently trading at $0.30 — putting it at risk of being delisted by the NYSE. The NYSE requires that companies maintain an average closing share price of at least $1 over 30 consecutive trading days.
Consolidating the number of shares trading will automatically bump up the price of each share. Babylon, the digital health scaleup, underwent a similar exercise last year.
The new CEO
Whitehead has worked with Chesterman for years. Before joining Cazoo at the start, he was chief strategy officer of Zoopla, the property platform also founded by Chesterman.
Amy Lewin is Sifted’s editor and cohost of Startup Europe — The Sifted Podcast, and writes Up Round, a weekly newsletter on VC. She tweets from @amyrlewin