Cambridge-based automotive marketplace company CarGurus has laid off 13 percent of its workforce as the novel coronavirus continues to roil the economy.
The company declined to give an individual headcount as to how many employees were let go and in what departments, instead writing in an email to BostInno that "most departments were impacted by this."
In a letter to employees, CarGurus president and chief operating officer Sam Zales said the day he announced the layoffs was "the most difficult I’ve faced during my time at CarGurus."
"There’s no denying the impact that COVID-19 has had on our global community; the automotive industry, our customers, and our business are no exception," Zales wrote. "Consumers are being asked to stay home, and many dealers have been forced to shut their sales floors, effectively pausing vehicle sales."
CarGurus has made several attempts to weather this storm already. Just this week, the company debuted contactless options to safely purchase vehicles during COVID-19. CarGurus also extended a 50 percent billings discount on its programs to help its partner dealers, but as Zales acknowledged in his letter, that move has translated to less near-term revenue.
Before making the decision to reduce its workforce, CarGurus also reduced its consumer marketing and discretionary spending and enacted a hiring freeze. The executive team and board of directors are cutting their pay in half for the next three months. Notably, CarGurus is also winding down operations in its emerging markets of Italy, Spain and Germany and is halting new international expansion efforts, Zales wrote.
CarGurus has offered severance packages to and extended health care benefits for the employees who were laid off. It has also extended access to career development resources via LinkedIn and created specialized program to help the employees find work elsewhere.
Founded in 2006, CarGurus went public in 2017. Only three months ago, the company acquired San Francisco-based competitor Autolist, part of a long-term plan to use mergers and acquisitions to build out its product suite and expand into dealer software and technology. CarGurus had also said in securities filings that it would expand its footprint in Greater Boston by nearly 50 percent with an agreement to lease 275,000 sq. ft. at the future 1001 Boylston St. tower. In an email to BostInno, a company spokesperson said that although the building plans are a few years out, CarGurus is working with the landlord to assess how COVID-19 might impact the timing and development plans for the building.
The company joins a growing number of Boston-area startups and tech firms that have been forced to lay off or furlough workers, notably including Zipcar—which laid off, then furloughed employees in the span of two weeks—and unicorns ezCater, Toast and DataRobot.
"I’m optimistic that we will emerge in a position of strength, with our remaining team more committed than ever to connecting dealers and consumers, and helping the greater automotive community rebuild as we recover," Zales wrote. "Please continue to take care of yourselves, your loved ones, and each other."
