CarMax has slashed 145 white-collar jobs, about 4% of its corporate staff, a move that comes as auto sellers face the pain of high prices and rising interest rates.
The nation's largest used-car retailer is trying to jump-start sales and restore profitability under Chief Executive Keith Barr, a former hospitality executive who took over in March with a mandate to reinvigorate the business.
By "running leaner," CarMax seeks to boost its competitiveness and value for customers, the company said. "These changes will help us move faster and create better alignment across teams," a CarMax spokeswoman said.
The cuts came at CarMax's Richmond, Va.-area headquarters as well as its offices in Dallas and Atlanta and at its Edmunds automotive research business Friday, she said.
CarMax owns more than 250 used-car dealerships covering most major markets in the U.S. The company's revenue slid 2% to $25.9 billion, while gross profit per retailed vehicle fell 2.5%, to $2,253, in the fiscal year ended Feb. 28.
In recent years, the used-car space flourished as new vehicle prices crossed $50,000 on average. Now, amid higher interest rates and rising fuel prices, more people could opt to delay any kind of car purchase.
The average used car sold for $27,239 in August, according to Kelley Blue Book-the highest since December 2022.
The Federal Reserve's recent move to raise short-term interest rates is "another potential headwind" for the used vehicle market, Cox senior director Jonathan Gregory said.
"Higher borrowing costs and added pressure on household budgets will weigh on vehicle demand," he said.
CarMax's main competitor, Carvana, spooked investors in late July when it issued full-year guidance implying a less profitable second half of 2026 than analysts expected. Still, Carvana's growth has outpaced the rest of the industry; earlier this year, the company announced a quarterly sales record.
At CarMax, Barr's strategy revolves around improving CarMax's digital capabilities, growing its in-house financing arm and reducing its costs to recondition used cars for sale.
Friday's move represents the first layoff action under Barr, but it was CarMax's third round of job cuts in less than a year. The company cut 350 jobs in October 2025 and another 230 in January 2026, the spokeswoman said.
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