Cazoo is consulting with staff on the closure of its three sites in Scotland, in a move that could lead to the loss of about 100 jobs.
The online used car dealer reported its fourth quarter preliminary results last week, alongside a revised strategic plan for 2023.
Despite growth in UK revenue to approximately £315m in the final quarter and £1.24bn over the full year, the business is still yet to reach profitability, with further actions being undertaken to achieve "optimisation of business and operations".
A Cazoo spokesperson said: "We have not made any decisions at this point, however we will be starting a consultation process with the teams at Livingston, Grangemouth and Edinburgh."
The Scottish withdrawal follows recent exits from EU markets, including the disposal of Italian and Spanish businesses, while French and German operations have been largely wound down, with the exception of subscription operations.
During the fourth quarter, UK retail revenue was up year-on-year, although wholesale revenue fell.
In terms of cars sold, around 65,000 deals were transacted in 2022, with more than 100,000 cars sold entirely online in the UK in the three years since Cazoo's launch.
The company's revised plan for 2023 stated: "In the current economic environment, we believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway."
The top line ambition is to sell 40,000 to 50,000 cars in the UK, focusing on higher margin and faster moving inventory "and to rationalise our operational footprint".
Certain vehicle preparation centres and customer centre facilities will be closed as part of this plan, meaning "further headcount reductions".
This should deliver less cash consumption and progress towards profitability, without the need to raise further external funding over the next 18 to 24 months. Cazoo now expects to end 2023 with more than £100m of cash and cash equivalents on its balance sheet.
Meanwhile, from the start of April, the roles of executive chair and chief executive will be split, with Alex Chesterman continuing in the role of full time executive chair and Paul Whitehead, currently chief operating officer, taking on the role of CEO.
Cazoo founder Chesterman commented: “I am pleased with our progress, despite the challenging economic backdrop.
“We remain, however, extremely mindful of the current economic environment and believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway.
“Whilst 2022 was a challenging year in many respects, our continued strong growth, notable improvement in unit economics during each quarter and market-leading consumer feedback gives us strong confidence in the long-term opportunity for Cazoo.
“We also remain on track and on budget with our withdrawal plan from the EU, having disposed of our Italian and Spanish businesses and largely wound down our French and German operations in Q4 2022.“
On 31 January, David Hobbs will step down from the board of directors. Mary Reilly will join the board as a director from the start of February, as well as becoming a member of the nominating and corporate governance committee and the audit committee.
She is currently a board member and audit chair of companies including Mitie, Essentra and Mar Holdco, and was previously a non-executive director and audit chair at companies including Travelzoo, Ferrexpo and Cape.
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