145 people got a piece of hard news this week that had nothing to do with how well they did their job. CarMax cut 4% of its corporate staff, hitting Richmond, Dallas, Atlanta, and its Edmunds team, the third round of cuts in less than a year after 350 jobs in October and 230 more in January. That's 725 people in twelve months, and it's worth sitting with that number as people before we get to strategy.
Keith Barr Inherited a Real Problem
New CEO Keith Barr, a former hospitality executive, took the job in March knowing exactly what he was walking into: a stock price sitting at roughly a third of what it was five years ago, revenue down 2% to $25.9 billion, and a rival across the street that's already solved the cost problem he's now racing to fix. His plan leans on better digital tools, growing CarMax's own financing arm, and lowering what it costs to recondition a used car for sale.
"These changes will help us move faster and create better alignment across teams," a company spokesperson said. That's the corporate version of the sentence. The human version is that a leaner team is now being asked to do the work that used to belong to 725 more people.
Why This Keeps Happening
Carvana didn't win by accident. Years ago they went out and bought a slew of their own auctions to control reconditioning costs directly, a slow, unglamorous bet that's now paying off in exactly the metric CarMax is scrambling to fix. That's the real gap here, not a talent problem, a head-start problem.
"I feel terrible for the people that are getting laid off. That's never something you want to see, especially in retail auto."
That reaction matters as much as the strategy does. Layoffs read as line items in a press release. They land as a Tuesday that changes someone's whole month.
🎙️ Full breakdown on today's Automotive State of the Union episode.
What we're watching from here
Whether Barr's plan actually closes the gap with Carvana, or whether this becomes a fourth round a year from now. Either way, the people doing the work that's left behind deserve a workplace that treats this moment honestly, not as routine cost discipline.
