Cox Automotive eliminated around 1,600 jobs this month as it prepared to better embrace online commerce (and nobody having any money). The company axed nearly 300 employees in June after having furloughed over 12,000 people in response to the coronavirus pandemic this spring. A large number of those positions were related to its Manheim auction arm, which suffered the hardest due to stringent lockdown protocols that prohibited public gatherings.
Now it’s talking about improving some of the digital features it added to Autotrader this year and embracing the virtual landscape to future-proof itself while forecasting a 25-percent cut in annual profits, and letting people go — with the majority of the layoffs coming to furloughed Manheim employees.
While around 130 Canadians will be leaving Cox Automotive under less-than-ideal circumstances, around 1,500 cuts are coming to America. Manheim, which swapped to a digital sales in March as a way to work with pandemic protocols, accounted for the majority of the U.S. staffing reductions. That’s according to Automotive News, which added that nearly half of the booted staffers weren’t employed full time.
“As Cox Automotive continues to evolve its business priorities and organizational structure in response to COVID-19, we’ve made the difficult decision to eliminate 1,600 North American positions,” spokesman Chintan Talati said in a statement. “While we regret the impact these moves have on our employees and their families, we’re working to create a Cox Automotive that’s prepared to meet changing client needs and lead the industry well into the future.”
Cox Automotive President Sandy Schwartz said in June that the company was performing better than that target but the final impact will depend on the virus and its toll on the economy. The company, which employs about 34,000 people globally across all brands, generates annual revenue of more than $7 billion.
The company plans to realign around a strategy it’s calling “The Way Forward,” which includes an emphasis on digital services and data insights.
While Cox Automotive has reopened some auctions to the public, often with restrictions, it seems genuinely terrified that the government could close everything down again with a wave of its hand. This has encouraged it (and practically every other company in the world) to get really comfortable with the idea of trying to do as much future business online as possible.
While the uptick in joblessness is a concern, we’re beginning to wonder what will happen to the real estate market when firms everywhere start dumping office space. Of course, the response to COVID-19 has always been one of extremes. The same people who told you nothing was wrong and that travel restrictions were somehow racist in February are the same folks telling everyone they have to follow stringent guidelines just to leave their homes; meanwhile, money is literally being printed to help support major players in the economy we stopped for several months as a “precaution.”
Frankly, it’s a minor miracle the company doesn’t have it any worse already. The business will still have over 30,000 employees around the world following the layoffs and believes it’s on target to do better than its revised financial estimates previously suggested. On Tuesday, Cox also said it reinstated executive pay that had been cut for two months during the pandemic and announced some changes to upper management. That includes assigning Steve Rowley as the new president of Cox Automotive (effective August 3rd) and leaves Sandy Schwartz to hang around to until the end of 2020. From there, he’ll become CEO of the Cox Family Office and “bring his business acumen to family investments.”