Shift (SFT) Announces Restructuring to Reduce Cost Structure

Shift Technologies, Inc. (Nasdaq: SFT), a consumer-centric omnichannel used auto retailer, today announced a plan to restructure and reduce the Company’s workforce to better align people and responsibilities with the Company’s omnichannel sales strategy. The restructuring plan is the result of a review by the Company’s recently appointed CEO Ayman Moussa as well as evaluations conducted as part of the Company’s review of strategic alternatives. The new structure is designed to improve the customer experience, increase efficiencies throughout the sales process, and better leverage our fixed costs. The Company has also decided to eliminate investment into the Company’s dealer marketplace business in order to focus on core operations.

“I joined Shift because I believe there is a meaningful opportunity to increase unit sales and unit economics through operational process improvements. We are announcing these changes today as a result of observations during my first month as CEO, leveraging best practices from over 20 years of auto industry experience and leadership. These changes include eliminating centralized operations roles, putting more ownership to team members on the ground in our hubs, as well as eliminating investment into the dealer marketplace. We are moving with a great sense of urgency to improve performance and maximize our cash runway,” said Mr. Moussa.

As a result of the restructuring, the Company expects to reduce its headcount by approximately 34%. Approximately 60% of the headcount reductions are in operational roles, primarily as a result of eliminating centralized support. The remaining headcount reductions are concentrated among technology roles as a result of eliminating investment into the dealer marketplace, as well as general corporate roles.

“I have been impressed by the dedication and engagement of the entire Shift team to deliver on our mission to make car purchase and ownership simple. The quality of the team makes this necessary decision to reduce our workforce especially difficult,” Mr. Moussa continued.

The Company expects the reduction in force to result in annualized SG&A savings of approximately $14 million. The Company expects to incur non-recurring charges of approximately $900,000, consisting primarily of employee severance costs.

Update on the Strategic Alternatives Review Process

The strategic alternatives review process established to maximize value for all stakeholders is ongoing.

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