London-based used car marketplace Cazoo is leaving the European Union entirely, it announced Thursday. It will now only operate in the UK.
The company confirmed to Sifted that the move will result in 750 job losses. This latest round of cuts follows another 750 layoffs announced in June, meaning a total of 1,500 people leaving the company in 2022, representing 30% of its workforce.
Cazoo confirmed to Sifted that the latest layoffs are additional to the earlier round of job losses.
As these employees' futures are thrown into uncertainty, Cazoo said that an “orderly wind-down” of operations in Spain and Germany has begun. In France and Italy discussions with union representatives are underway — a process companies are obliged to undergo if they’re laying off employees.
Cazoo has only been active in the European Union since the start of the year, but has recently undergone a strategic review of its business there, it said, and concluded that it should focus its attention solely on the UK market.
In August, the company reported growing losses, reaching £243m for the six months up to the end of June — double the losses for the previous six months, which stood at £102m.
Withdrawing from the EU will result in net savings of £100m by the end of 2023, Cazoo said. The move will “materially expedite its path to profitability” and remove the need to raise more funding.
“Management has concluded that the right course of action is for Cazoo to now focus exclusively on its core opportunity in the UK, an enormous addressable market with approximately 8m used car transactions and a value of over £100bn annually,” the company said in a press statement.
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It’s a particularly stark turnaround for the Italian market, which Cazoo only entered into in June this year.
When the last set of layoffs were announced, the company's founder CEO Alex Chesterman cited macroeconomic factors as reasons for the decision.
“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," he said. “This perfect storm has placed cash conservation top of mind for the company, ahead of growth.”