Online used-vehicle retailer Shift Technologies Inc. said Tuesday that the company is restructuring and reducing its employee headcount by one-third.
Shift Technologies of San Francisco is cutting its headcount — which it reported to be 459 as of March 31 — by about 34 percent as it focuses “all resources” on its omnichannel used-vehicle operations and works to improve cost efficiency, according to a regulatory document it filed Tuesday.
About 60 percent of the roles cut are operational, primarily the result of “eliminating centralized support,” according to a news release. The rest are concentrated among technology roles because the company also is eliminating investment into its dealer marketplace business. General corporate roles also are being reduced, the news release said.
In the Tuesday filing, the company said it expected the restructuring to be “substantially completed” that same day.
“We are moving with a great sense of urgency to improve performance and maximize our cash runway,” Shift Technologies CEO Ayman Moussa said in a statement.
The restructuring follows a review by Moussa — appointed as CEO last month — and after evaluations conducted “as part of the company’s ongoing review of strategic alternatives” for the business, according to the news release.
Shift Technologies acquired in May 2022 the dealer listing marketplace assets of Fair Technologies, a vehicle retailing platform, originally for the purposes of building out its dealer marketplace business.
The workforce reduction in July comes after a round of job cuts Shift Technologies made in the first quarter.
Shares of Shift Technologies were down 6.7 percent to $2.23 in midday trading on Thursday.
Shift Technologies said it expects annualized savings of $14 million as a result of its latest workforce reduction. The company will take a one-time charge of about $900,000, which it said primarily stems from employee severance costs.
“The quality of the team makes this necessary decision to reduce our workforce especially difficult,” Moussa said.
Shift Technologies, which reported a $48.1 million net loss in the first quarter, faces an issue of insufficient cash to last the year.
A variety of factors — the company’s losses, negative cash flow, current cash and working capital position and expiration of its floorplan facility in December — raise “substantial doubt” about its ability to continue as a going concern, Shift Technologies said in an amended first-quarter regulatory filing on June 29.