Vroom, an American online retailer of used cars, has reduced its workforce by 11 per cent, affecting approximately 120 workers across various departments and locations.

According to a filing with the US Securities and Exchange Commission (SEC), Vroom has implemented an 'organisational restructuring' which includes a review of all aspects of the business, and as a result, the job cut was carried out.

As per Automotive News, the reduction of employees by the company has been linked to its long-term business plan, which focuses on cost-cutting and was adopted last year.

"The decision to reduce staff this week, while difficult, is consistent with our commitment to our long-term roadmap and objectives for the year to prioritise unit economics and growth, improve our customer experience, reduce cost per unit and maximise liquidity," the company was quoted as saying.

According to an SEC filing, the company anticipates incurring cash charges of about $2 million, mainly for severance, and realizing approximately $15 million in annual cash savings due to the reduction in force.

The company will provide severance packages and job placement aid to impacted employees, while also recruiting for essential roles.

In an attempt to reduce expenses and eliminate redundancies resulting from its merger with CarLotz, Shift Technologies, a US-based online marketplace for buying and selling used cars, downsized its workforce by 30% during the first quarter of the previous month.

TechCrunch reported that the job cuts were announced by CEO Jeff Clementz during the earnings call, coinciding with the company's increase in operating loss and decline in revenue during the fourth quarter.