Carvana Layoffs Just the Latest in Making “Zoom Firing” a Thing

Credit: lukasbieri

Recently, used car dealer Carvana let go of 2,500 employees, many of whom were done over a Zoom meeting. This caused an uproar among the company’s workforce since the meeting wasn’t prefaced with who will be laid off. After the Zoom firing, Caravana sent an email to its employees, including those laid off, that details why the layoffs took place and what happens moving forward. Comprising around 12% of the workforce, the dismissed employees mostly held operational positions in the company.

The Carvana layoffs followed the company’s dismal first-quarter performance this year, which saw it incur a $260 million net loss as well as a quarterly loss of $2.89 per share. Carvana cited operational constraints, high vehicle prices, and fluctuating interest rates as some of the factors that slowed down its growth, which in turn led to the firings. This is a stark difference from its strong performance at the onset of COVID-19.

Carvana intends to provide the laid-off employees with four weeks of pay and an additional week for every year an employee had been with the company. It will also grant extended health care for three months, eligibility for a car purchase program, benefit shares, career support, and notification of rehiring when the company achieves growth. The employees, however, are not taking the layoffs well. Many have taken to Twitter to air their grievances.

This comes as a shocking development considering video conferencing tools like Zoom have been associated with connecting people, and not severing connections. But with the current ubiquity of remote work, there may be a shift in how layoffs are administered. Surprisingly, it didn’t begin with Carvana.

Are Digital Mass Firings in Season?

Five months prior to the Carvana layoffs, mortgage provider Better was the subject of controversy as its CEO, Vishal Garg, sacked 900 employees over a one-way Zoom call. After which, he called the terminated staffers “dumb dolphins” in an email. This led to a wave of backlash that saw three of the company’s top executives handing out their resignations. At the height of the pandemic, a company called TripActions terminated 100 employees over a video conference. Other companies have done the same and will probably do so in the future.  So, does this signal a new norm in handing out layoffs?

Many of these incidents share a commonality besides video conferencing and remote work: They were messy affairs accompanied by bad press. And Carvana’s case appears to be no exception. To be fair to these companies, firing multiple people online in one go appears to be economical given that it requires less effort and does the job more quickly than performing individual calls. In part, it also shortens the emails executives have to compose explaining the rationale behind the layoffs and what will happen to the terminated staffers.

However, conducting layoffs in this manner would lead employees to feel devalued, humiliated, and betrayed by their employers. After all, terminating employees in public company space, albeit digitally, is humiliating. Unless software developers come up with a digital solution for upholding the value and dignity of laid-off workers, mass Zoom firings won’t ever become a thing. This won’t stop companies from trying, though, as seen in the Carvana layoffs.