Cox Automotive, facing a sharp decline in 2020 revenue, eliminated roughly 275 jobs on Thursday as the dealership technology company accelerates the realignment of operations in response to the coronavirus outbreak.
The cuts are the first permanent job reductions stemming from the pandemic, Cox confirmed. More than 60 percent of affected employees had been furloughed in May, the privately held company added.
“Cox Automotive is evolving our strategy, business model and organizational structure that we started last year and accelerated as part of our response to COVID-19,” the Atlanta company said in a statement.
“As part of that work, we’re taking a thoughtful approach to determining which roles are needed and made the difficult decision to eliminate about 275 positions today. … While we regret the impact this has on our employees and their families, we’re working to create a Cox Automotive that’s prepared to lead the industry well into the future.”
Cox did not immediately identify divisions and business units where jobs were cut. Karl Brauer, executive publisher of Autotrader and Kelley Blue Book, said Thursday that he is among the affected employees. He had worked for Cox Automotive for seven years.
Cox Automotive in May furloughed more than 12,500 employees, about 10,000 of whom are based in the U.S. About 9,000 of the furloughed employees work for Cox’s Manheim wholesale auction unit, which switched to all-digital auctions in March as state and local governments required nonessential businesses to close physical locations to limit the spread of COVID-19, the respiratory illness caused by the coronavirus.
Manheim last month said it will bring back more than 300 employees. Cox Automotive President Sandy Schwartz recently told Automotive News some of the recalled employees work in reconditioning or titling.
Close to 5,700 of the furloughed Manheim employees worked part time, including as drivers who move vehicles through auction lanes.
Schwartz told Automotive News this month that furloughed employees will be brought back when work becomes available, but some of the furloughed positions may be permanently eliminated.
The pandemic prompted Cox to forecast a 25 percent decline in revenue this year, though Schwartz recently said the company is performing better than that target. The outcome for the year, however, will depend on how the economy rebounds and how the virus spreads.
Urvaksh Karkaria contributed to this report.