Cazoo is consulting staff on the closure of a large number of its premises across the country in a move affecting hundreds of staff.
Up to 15 of Cazoo’s customer hand over centres – opened with a fan fare over the last few years across the UK – are scheduled to close if proposals go ahead.
The number of Cazoo preparation centres could also be reduced to three.
Cazoo acquired four prep sites when it snapped up Smart Fleet Solutions in February 2021, and added six more when it bought SMH Fleet Solutions in September that year for £70m.
It is believed Cazoo also acquired a preparation centre as part of its Imperial Cars deal.
Staff in Cazoo’s technology team and head office are also under the threat of redundancy following today’s announcement.
Chief customer officer Darren Bentley broke the news to staff in an all-hands Google Meet at 3pm today.
During that call – which has been leaked in full to Car Dealer – Bentley said Cazoo was also proposing to close its Lisbon office.
In today’s announcement to the New York Stock Exchange, Cazoo told investors it would be ‘closing more preparation centres and customer handover sites’.
However, it did not reveal how many would shut or how that would impact staff. The call leaked to Car Dealer revealed details of the online retailer’s proposals for the first time.
In the meeting, Cazoo said it plans to only retain customer handover centres in Birmingham, Bristol, Chertsey, Lakeside, Manchester, Northampton and Wembley.
On its website, it lists 22 sites where customers are handed over used cars bought online.
The employee at Cazoo, who shared the details with Car Dealer, said one of the sites earmarked for closure under the plan was in Edinburgh which has only recently opened after a ‘£1.5m refit’.
Many of the sites facing proposed closure were rebranded after Cazoo bought Imperial Car Supermarkets in 2020. Huge refits were undertaken as the company erected new signage and rolled out the openings across the country.
Staff were first told their jobs were at risk in a rushed call at midday today which they said they were informed about ‘two minutes before it started’.
A second call was scheduled for 3pm, a recording of which was subsequently leaked.
Bentley told staff on the call: ‘We’re targeting sales volume this year of 40,000 units, which is a step backwards from the 60,000 that we did in 2022.
‘However, the challenge within that is that our current infrastructure and headcount is set up to support a significantly higher level of retail sales, in the region of 200,000, and therefore the business needs to restructure the business and to continue to align with that revised sales volume.
‘That’s necessary in order to get to the cost savings, and the business efficiencies that we’re looking for from across all the teams in the business.’
Cazoo said this morning that it has reduced the number of cars it plans to sell in 2023 – to between 40,000 and 50,000, from around 65,000 achieved in 2022.
In its investor presentation shared before listing, Cazoo said it would be selling 176,000 used cars in 2023 and 58,000 in Europe.
Staff were asked to join the call in an email from Cazoo’s executive assistant with teams dialling in from across the country.
Cazoo has closed its customer handover centres this afternoon and no staff will work the evening shift in call centres so affected teams have time to process the news.
Bentley added: ‘The proposals that we have announced today cover reducing the number of vehicle preparation centres down to three, we’re proposing to reduce the number of CCCs [Cazoo Customer Centres] in which we operate, and closing our Lisbon office, and reducing our overall technology team and reconsolidating that to London, along with reducing a number of our head office support functions.
‘So the current proposal is to retain Birmingham, Bristol, Chertsey, Lakeside, Manchester, Northampton and Wembley, but we would close all other CCCs outside of those areas, along with our customer support presence in Leeds. All of our in-house customer support will be moving back to Southampton.
‘Because the company is considering these proposals, unfortunately today’s announcement is to advise you that your roles are therefore impacted and at risk of redundancy.’
A consultancy period will now take place over the next two weeks. Bentley pointed out that nothing has yet been decided and these were ‘proposals’.
Cazoo has been contacted for comment.
In today’s announcement to the New York Stock Exchange, Cazoo gave little detail on what its downsizing plans were.
Cazoo said: ‘In the current economic environment we 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.
‘In line with the lower unit expectations for 2023 and the current economic climate, we will be making our operational and logistics networks more efficient through the closure of certain of our vehicle preparation centre and customer centre facilities and making further headcount reductions.
‘This plan is in the process of being finalised and we will provide more detailed information at the time of our FY 2022 results.’
This morning’s update came with details of Cazoo’s financial performance for the final quarter of 2022 and with preliminary figures for the year. Revenue reached £315m for Q4 and topped £1.24bn for the year.
It said it is now managing to make an average of £600 per car it sells. Industry rivals achieve upwards of £1,500.
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