Top US auto dealer's job cuts may be permanent due to digital shift

The largest US new-car retailer now has about 21,000 employees, down from roughly 25,000 at the end of last year, the dealership's CEO has said.
By : Bloomberg
| Updated on: 23 Jul 2020, 06:16 PM
File photo used for representational purpose only
File photo used for representational purpose only
File photo used for representational purpose only
File photo used for representational purpose only

AutoNation Inc. said the thousands of staff it dismissed in the midst of the pandemic may not be called back because consumers are making a permanent shift to buying vehicles online.

The largest US new-car retailer now has about 21,000 employees, down from roughly 25,000 at the end of last year, Chief Executive Officer Mike Jackson said in an interview. The job cuts helped AutoNation reduce expenses and deliver adjusted earnings per share that beat analysts’ highest estimate for the second quarter.

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(Also read: Auto dealers in troubled waters may sink to further depths of despair)

“We may add some as the level of business fully recovers," Jackson, 71, said by phone. What will be lasting, he said, is the reduction in costs related to the digital shift: 45% of AutoNation’s customers bought their cars online in the three months that ended in June.

AutoNation shares surged 8.3% to $52.90 as of 8 a.m. Thursday in New York, before the start of regular trading.

First Published Date: 23 Jul 2020, 06:15 PM IST
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