Bloomberg Línea — The onset of the ‘tech winter’ appears to be accelerating for Kavak, the Mexican used car sales platform, and a unicorn with a valuation of more than $8 billion, with layoffs reported from within its Brazil operations.
According to former employees’ testimonies compiled by Bloomberg Linea, at least 50 people are said to have left the company in a process that has been ongoing for several weeks.
The layoffs, both in the São Paulo offices and in the so-called ‘Kavak City’ in Rio de Janeiro, take place a few months after the company confirmed an investment commitment of $500 million in Latin America’s largest economy.
Bloomberg Línea approached Kavak executives in both Mexico and Brazil, but they declined to comment.
Several users on LinkedIn who have been associated with Kavak posted about how they were terminated, with Bloomberg Línea validating their affiliation with the startup after cross-checking with sources familiar with the company.
Some former employees told Bloomberg Línea that the way they were terminated from the company was not ideal.
“It was in a cold manner, and with no real justification,” a former employee said, who asked to remain anonymous due to the fact they are considering joining a lawsuit against the Mexican startup.
Another former employee told Bloomberg Línea that they were told by the company they did not “fit the work culture” at Kavak.
Other testimonies indicate that layoffs in Brazil have been occurring since as early as March of this year.
In an interview in May, Kavak’s COO Federico Ranero told Bloomberg Línea that the team is important for the operation, but stressed that “Kavak is not for everyone. This is a highly demanding place where we cannot compromise an average or relative performance to what’s happening in the market, because we have to do something absolutely different. This is about making high demands on the team to reach higher and higher goals”.
A former employee of Kavak in the Mexican city of Querétaro told Bloomberg Línea that the hiring processes were not rigorous enough and some personnel were hired with profiles that did not meet requirements, and which resulted in a constant staff turnover and burnout among employees.
