Jan 4, 2023 - Business

Tempe-based Carvana may go bankrupt, costing metro Phoenix jobs

A car vending machine that says, "Carvana."

A Carvana used car "vending machine" in Miami. Photo: Joe Raedle/Getty Images

Tempe-based Carvana is staring down bankruptcy, potentially putting thousands of Valley jobs at risk.

What's happening: Last month, the used car retailer's largest creditors signed an agreement to negotiate debt restructuring together, spiking concerns about imminent bankruptcy, Bloomberg reported.

  • The agreement came after Carvana stock plummeted 97% last year.

Why it matters: Carvana employed about 21,000 people in 2021, The Arizona Republic reported. Many of those are Phoenix-based jobs.

  • Amid financial struggles last year, the company laid off 4,000 people.

State of play: Carvana launched in 2013 and grew quickly to become one of the most valuable corporations in Arizona.

  • The used car industry soared during the pandemic, as supply chain issues made it harder and more expensive to buy new vehicles. Carvana's stock price more than doubled in 2020.
  • Yes, but: Rising interest rates and fears about a recession have made people less inclined to pay big money for used cars, tanking the industry as a whole, CNBC reported.

What they're saying: Carvana leadership has downplayed the company's financial situation and refused to comment on the potential of bankruptcy.

  • In a statement to CNBC last month, the company said it is "singularly focused" on executing its plan to profitability, outlined in a recent shareholder letter, and has enough liquidity to right the ship.

What we're watching: If the company does go under, we're interested to know what will become of the distinctive car vending machine towers it's installed throughout the country, including along the Loop 202 opposite of Tempe Town Lake.

In all likelihood, they'll become a pile of rubble. But our friends in Dallas have a few ideas for creative repurposing.


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