Vehicle listings company CarGurus will lay off 13 percent of its global work force and end some European operations as it deals with the economic impact of the COVID-19 outbreak.
The Cambridge, Mass., company said Thursday in a regulatory filing that in addition to the layoffs, it will end operations in Germany, Italy and Spain, as well as suspend expansion into new international markets. CarGurus had 921 full-time employees as of Dec. 31, according to its most recent annual report filed in February.
Several top CarGurus executives also will take a temporary 50 percent cut to their annual base salaries, effective April 16, for three months. Board members' compensation also will be cut by about 50 percent for three months.
CEO Langley Steinert's annual base salary remains at $10,000, according to the filing. Steinert's annual base salary was reduced to $50,000 effective Jan. 1, 2019, after his request to align his interests with stockholders, according to the company's proxy statement filed last year. CarGurus has not yet filed its proxy statement this year and it wasn't immediately clear when Steinert's salary was reduced to $10,000.
Steinert, in a letter to shareholders, said hiring was put on hold in March.
"This is the most difficult decision I have been a part of at CarGurus, and our executive team, board of directors, and I made every effort to preserve our employee base before making this decision to impact talented colleagues who have contributed so substantially to the growth of our company," he wrote.
The company will offer severance packages to affected employees, including extended health care benefits during the coronavirus pandemic, Steinert wrote.
CarGurus discounted dealerships' marketplace subscription rates by 50 percent through May. That action led to a short-term revenue loss that could not be offset by other cost-cutting measures, President and COO Sam Zales said in a letter to employees.
CarGurus will record an estimated $4.3 million in pretax restructuring charges during the second quarter related to its cost-cutting plan, it told regulators. About 75 percent of that is tied to employee severance and benefits costs.
CarGurus has not yet said when it will release its first-quarter earnings.
