Cazoo to slash jobs, founder steps down as car trader hit by sales slump

UK online car retailer Cazoo is slashing more jobs and closing customer service centres in response to a fall in sales, with founder Alex Chesterman stepping down as chief executive.

The New York-listed business, which sold around 65,000 cars in the UK in 2022, now expects to shift 40,000 - 50,000 vehicles in this year compared with estimates of 100,000 and will be making “further headcount reductions” to cut costs.

Chesterman will become executive chairman and replaced by current chief operating officer Paul Whitehead as CEO. He said he was “extremely mindful of the current economic environment and believe[s] 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".

“Our new 2023 plan, which includes more modest top line ambitions, ensures that we continue to improve our unit economics, reduces our fixed costs and conserves cash,” he said.

Cazoo shares have fallen 93% over the past year, with the firm posting a £243m in the first half of 2022. It announced a wave of cost-cutting measures in last year, including laying off hundreds of staff and closing down operations in the European Union.

Chesterman, who previously founded DVD rental firm Lovefilm and property website Zoopla, said focusing solely on the UK should still enable the company to achieve its goal of hitting profitability by the end of 2023.

Founded in 2018, Cazoo hit a valuation of $8bn (£6.5bn when it was floated on the New York stock exchange in 2021. Now, it is worth well under $1bn.

Reporting by Frank Prenesti for Sharecast.com