Auto retail giant AutoNation Inc. is permanently cutting about 3,500 jobs across the company — or about half the number of workers it furloughed in early April amid the coronavirus pandemic.
The nation's largest new-vehicle retailer brought back more than 3,500 furloughed workers, including 2,300 since May 11, after furloughing 7,000 employees following a sharp drop in vehicle sales and service business.
Marc Cannon, AutoNation's chief customer experience officer, said AutoNation was able to bring back many employees as vehicle sales have improved over the last several weeks.
"The business environment continues to change and AutoNation is adapting by restructuring and reducing the work force," Cannon said in an emailed statement to Automotive News.
"At AutoNation we have adjusted to the new normal, which focuses on digital and store efficiencies. We have made strategic adjustments to capitalize on the digital marketing and website actions. As a result, we have made the difficult decision to eliminate approximately 3,500 positions in the field and at headquarters, most of which were associates on unpaid leave."
AutoNation, with about 230 dealerships across the U.S., did not immediately have a breakdown of how many employees being separated were at the store or corporate level. Cannon said the jobs were coast-to-coast in operations, at headquarters, dealerships and its shared service center in Texas, which handles back-office work.
At the end of 2019, it had about 25,000 employees.
As part of its restructuring, AutoNation is combining its Tennessee and Virginia market with its Georgia and Northeast markets, resulting in some market-level employees being let go, Cannon said.
In early April, AutoNation also announced it had temporarily cut employee base pay, frozen hiring, trimmed advertising costs by about half for the second quarter and was postponing more than $50 million in capital expenditures.
It also said CEO Cheryl Miller, who was later granted leave for undisclosed health reasons, and Mike Jackson, the company's chairman who has resumed CEO duties until Miller returns, each took 50 percent salary cuts, while other executives, corporate and regional staff took pay cuts of 20 to 35 percent.
The company said April 24 that it returned $77 million in federal Paycheck Protection Program loans for 83 stores.
Like many auto retailers, AutoNation quickly adapted in the coronavirus pandemic to handle more vehicle sales online. Its percentage of sales originating online grew from 35 percent to 45 percent over about a month during the pandemic, AutoNation said.
Cannon indicated hiring for some positions may be possible in the future.
"We will probably add back people over time, but that will depend on the skill sets we think we need going forward," he said.
AutoNation, of Fort Lauderdale, Fla., ranks No. 1 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 282,602 new vehicles in 2019.