AutoNation Cutting Roughly 3,500 Jobs
Marc Cannon, AutoNation’s chief customer experience officer, explained the situation to Automotive News — noting that some employees may return once vehicle sales stage steady improvements.
“The business environment continues to change and AutoNation is adapting by restructuring and reducing the work force,” Cannon said. “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.”
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.
Original reports claimed the company received around $95 million from PPP.
Worth a tidy $3.1 billion, AutoNation undoubtedly suffered from the extended lockdown, but it could have been much worse. Despite losing about half its stock value in March, the firm has since seen shares seesawing back to normal. Wall Street has actually proven pretty forgiving in general, not that that meshes with anything we’re seeing on the ground. Automotive entities have all taken financial hits and only Hertz seems incapable of rebounding.
We’re not sure if we should attribute the oddly healthy trading as a sign the public has faith in the economy turning a corner, or as more evidence that investors don’t live on the same planet as the rest of us.
Meanwhile, AutoNation is embracing online sales. Local governments forcing brands to close shop gave them little recourse but to find new ways of doing business. Economists suggested swapping to a more digital model would help entities endure the pandemic and help firms reduce overhead, as they’d need fewer employees. Some urged caution, noting that widespread shifts away from physical retail locations will likely exacerbate national unemployment rates and disproportionately benefit the biggest companies while smaller business continue to struggle, or simply whither and die.
Like many auto retailers, AutoNation was shifting toward indirect sales prior to 2020. The retailer claims the percentage of sales originating online grew 35-45 percent over a single month of the pandemic.
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