CarMax Orders Workers Back to Office 5 Days a Week — Then Lays Off 230 More Just Months After CEO Ousted

CarMax has laid off a further 230 corporate employees and ordered remaining staff back to the office five days a week, intensifying turmoil at a company still reeling from its chief executive's departure less than two months ago.

The Goochland, Virginia-based used car retailer announced the layoffs on Wednesday, affecting workers at its West Creek headquarters, its Midtown office at Sauer Center in Richmond, and locations in Dallas, Texas, and Atlanta, Georgia. Reports indicate that of those laid off, 113 were based in the Richmond area, with the majority being salaried employees, who will receive pay and benefits through 31 January.

'We have made the difficult decision to reduce Home Office and CarMax Auto Finance staffing by approximately 230 positions,' the company stated. 'After careful consideration, we determined that the elimination of certain roles was necessary to reduce costs and operate with a faster, leaner corporate workforce.'

More Than 1,000 Jobs Shed in Under Two Years

This latest announcement marks at least the third significant round of layoffs since summer 2024, when CarMax cut 415 employees, including 14 in the local Richmond area. In late October, the company cut another 350 positions, with around two dozen based in Richmond. In total, the Fortune 500 firm has now shed more than 1,000 jobs in less than two years, according to Richmond Biz Sense.

The layoffs come amid a declining share price and increasing competition from Carvana, its main rival. The pressures, coupled with falling sales in the past two quarters, led to the departure of CEO Bill Nash in November. Nash, who had led the company for nine years and worked at CarMax for nearly three decades, was succeeded temporarily by board member David McCreight. Meanwhile, former CEO Tom Folliard, who led CarMax from 2006 to 2016, returned to assist with what the company termed 'righting the ship'.

Hybrid Work Is Over for Corporate Staff

Alongside the leadership changes and job cuts, CarMax has steadily tightened its remote working policies. Around the time of Nash's departure, the company announced that corporate employees would be required to work in-office four days a week, Monday to Thursday, starting 1 March.

However, since McCreight and Folliard took the helm, staff at the West Creek and Midtown offices have now been told they must be present five days a week from 1 March. During the pandemic, many companies adopted hybrid arrangements, with employees working at least two days remotely; management was required to be in the office three days.

For the more than 2,000 CarMax employees based in the Richmond region, flexibility has now been eliminated altogether.

Carvana Gains Ground as CarMax Stumbles

CarMax's difficulties starkly contrast with Carvana's rapid performance improvement. In its latest quarterly earnings report, released in December, CarMax reported sales and revenue of $5.79 billion (£4.32 billion) for the three-month period, down nearly 7% from the previous year. Net income for the quarter was $62 million (£44.8 million), representing a 50% decline.

Meanwhile, Carvana posted revenue of $5.6 billion (£4.18 billion) and net income of $263 million (£196.5 million) in its most recent quarter, quickly catching up with its larger competitor. Industry analysts note that the used car market has become highly competitive, with CarMax's market share in used vehicle retail declining materially as rivals price their inventory more aggressively.

'These conditions have put CarMax behind the eight ball,' reported Dealership Guy, adding that 'broader restructuring efforts from the company are highly likely to continue.'

What This Means for CarMax's Future

CarMax stock experienced a slight rise on Wednesday following the layoffs news, closing at $46.80 (£34.98) per share. Although this represents a 14% increase over the past month, the stock remains 41% lower than at the same time last year.

The company has announced that affected employees will receive severance pay, career support services, and the opportunity to apply for other roles within the organisation. Currently, CarMax employs more than 30,000 staff nationwide, including corporate employees and those at over 250 retail stores.

For job seekers and industry observers, the key question remains whether CarMax can stabilise before the next wave of restructuring becomes necessary.