Cox Automotive is laying off 950 employees — or roughly 3 percent of its full-time work force — in an ongoing effort to cut costs, the company said in an internal memo obtained by Automotive News.
Cox says another 225 employees, about half of those eligible, have decided to retire early through the company’s voluntary retirement program. They are slated to leave Aug. 31.
Cox also has identified open positions that will not be filled and contractors or consultants whose work won’t be renewed.
The memo says the staffers to be laid off will be notified throughout August, and the “transition” will be completed by the end of September. The employees will receive “severance and support” as they look for new opportunities, the memo says.
“At this time, we do not anticipate any additional large-scale reductions,” Lou Laste, a Cox Automotive spokesman, wrote in an email to Automotive News. “That said, our business and the market continue to evolve, and therefore we are never able to guarantee that a role will not change or be eliminated in the future.”
In response to a query, Laste described the cuts as “pretty much across the board and spread across various business units,” adding that “no one type of job was affected” disproportionately.
Cox warned of looming cuts in a June memo that outlined its intentions to trim labor costs, reduce travel and entertainment spending and eliminate duplicative services and excess bureaucracy, among other things. The company, which has made a flurry of acquisitions in recent years, is facing slower revenue growth and rising expenses, which Cox said were outpacing revenues by around $100 million in its 2017 budget when the June memo was sent.
In the memo, Cox said these are “gut-wrenching decisions” that will be painful for all involved, but the steps are “crucial” to its future as it works to integrate its many properties. The emailed memo was sent on behalf of President Sandy Schwartz and signed with his initials.
“We are evaluating a variety of additional initiatives that would make us more efficient and effective — and we expect to constantly evolve as we seize opportunities associated with trends such as digital retailing, autonomous vehicles and mobility services like car-sharing and subscriptions,” Cox said in the memo. “It’s cliché to say that change is the only constant, but in a fast-moving industry like automotive it is definitely true.”
The job cuts come at a time when Cox is looking to revolutionize the digital retailing experience by bringing a transactional atmosphere to dealership websites that allows consumers to handle more of the buying process on the Web.
Although jobs are being cut, Laste stood by his June declaration that there are no plans for Cox to divest any of its businesses.
While the acquisition spree gave the company a deep portfolio of brands, Laste admitted in June that multiple acquisitions can produce the “inefficient and duplicative work” that Cox is seeking to cut. Laste said managing that work, and supporting the larger volume of work that comes with acquisitions, is a normal part of business operations.
“We’ve taken great care to ensure that everything we do now gives us the best chance to succeed well into the future,” Cox said in the latest memo. “We are building a stronger Cox Automotive so that we can fulfill the dream of a connected system of solutions that help our clients reach for the next frontier.”