Fair, which offers an automotive subscription app, will reduce its staff by 40% in an effort to increase profitability, according to an internal company memo sourced by TechCrunch.
TechCrunch estimated that 215 employees would lose their jobs at Fair.
Among the employees let go is Chief Financial Officer Tyler Painter, brother of Chief Executive Scott Painter, who signed the memo. Kirk Shryoc, managing partner and co-founder of Hard Right Solutions LLC, a software and consultancy firm, and an investor in startups, will step in as the company’s interim CFO. It could not be determined at press time whether Shryoc is an investor in Fair.
To date, Fair has raised more than $2 billion of venture funding, more than any other auto finance startup to date. Softbank, the venture firm behind WeWork and Uber, is among Fair’s largest investors. Ally Financial has also provided Fair with a $100 million credit facility. According to published reports, the company has a current valuation of approximately $1.2 billion.
The job cuts come one month after Mizuho Bank backed the three-year-old startup with a $500 million revolving credit facility.
In what is described as “proactive steps” to ensure the Fair’s future as a profitable public company, Painter said the remaining resources will be focused on “strengthening Fair’s core technology and reducing costs associated with the capital-intensive supply side of our business.”
Moving forward, Painter said the company will spend the next few months to “transform the supply side of our business” while building a profitable model.
Since its inception in August 2017, Fair has provided cars for 45,000 users through its 3,000 dealer partners in 30 markets across the country.
The job cuts appear to be already limiting some of Fair’s business operations. Auto Finance News has learned that Fair’s “Escalation Department” in Phoenix, which fields some customer service inquiries, was closed today. It is not common for that department to be closed on a Thursday.
Additionally today, two Fair executives — Chief Product Officer Jay Trinidad and Chief Strategy Officer Craig Nehamen — dropped out from speaking engagements next week at the 2019 Auto Finance Summit in Las Vegas, according to an email sent to AFN by Rebecca Brancato, an executive assistant at Fair.
Fair was not available for comment at press time.
Source : AutoFinanceNews
