Hertz cutting 4000 jobs to reduce costs - Car Rental News
Hertz cutting 4000 jobs to reduce costs
Car Rental News - 19/01/2009
Hertz said that it needs to cut operating costs as the recession causes demand for travel to slow.
The job cuts amount to nearly 12 percent of the rental car giant’s workforce and are expected to save the company between $150 and $170 million this year, according to a statement issued on Friday. In the fourth quarter, related expenses amounting to $20-25 million will be incurred.
A decline in the demand for both business and leisure travel had led to decreased volume in the car rental market, as well as in rental rates. Including the cuts just announced, Hertz will have reduced its workforce by 32 percent since August 2006, said CEO Mark Frissora.
“There are just not enough people traveling,” said the president of Vehicle Replacement Consulting Group, Michael Kane. “If you look out 30 to 90 days, there’s a good chance things will get worse before they get better.”
During 2008, Hertz shares fell by 68 percent. In the third quarter, the company’s profits fell sharply as well, down by 89 percent to $17.7 million. Its sales dropped off by 1.2 percent, down to $2.42 billion, the second-largest rental car company in the U.S. stated in a report released early in November.