Online used vehicle dealer Vroom announced it is laying off 515 workers in the Houston area and closing two facilities permanently, according to recent filings with the Texas Workforce Commission.
The layoffs in Texas are part of the Houston-based company’s restructuring efforts announced last week. Vroom said it is discontinuing its e-commerce operations and winding down its online used vehicle dealership business, resulting in the layoffs of 800 employees across the country.
“We intended to raise additional capital to fund our operations and support the extension of our vehicle floorplan facility beyond its current expiration date of March 31,” CEO Thomas Shortt said in a news release. “Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market. Obviously, we are very disappointed with this outcome.”
As part of the restructuring, Vroom is closing two facilities in the Houston area and eliminating 232 jobs. The company also announced it was cutting 283 workers at a facility in Stafford, which will remain open. Stafford is about 19 miles southwest of Houston.
One of the locations being shut down is Vroom’s Texas Direct Auto storefront also located in Stafford, while the other facility being closed is a distribution center in the same area.
Vroom (Nasdaq: VRM), which peaked at a valuation of over $8 billion in August 2020, has recently seen its market cap fall to about $75 million.
The company is suspending transactions through Vroom.com and halting purchases of additional used vehicles and will sell its current used vehicle inventory through wholesale channels, according to Securities and Exchange Commission filings.
Officials for Vroom said they will shift resources to its other lines of businesses, including United Auto Credit Corp., an automotive finance company; and CarStory, an AI-powered analytics and digital services provider.
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