Cox Automotive eliminated roughly 1,600 positions in North America, including 1,500 in the United States and 130 in Canada, as the Atlanta dealership services company reorganizes and prepares to expand digital initiatives amid the coronavirus pandemic.
The affected employees held corporate and field roles, Cox spokesman Chintan Talati said Wednesday. He said the majority of those cut worked for the company's Manheim wholesale auction unit.
"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," 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."
All affected employees in Canada had been on temporary layoffs.
Maria Soklis, president of Cox Automotive Canada, told Automotive News Canada earlier in July — before the layoffs — that apart from a skeleton staff for the Manheim auction division, her company has had all 1,000 employees working remotely since mid-March. The company is in “no particular rush” to return workers to the office and intends to keep some positions remote permanently, she said.
Those who return to the office will do so slowly and with staggered work hours to reduce in-person attendance requirements, which Soklis said could trigger a re-evaluation of its office space requirements should these arrangements become permanent.
“Will the vaccine work? Will there be another wave? Will there be a different strain? I don’t know,” she said. “I’d rather be sure that our people are coming back slowly and feel comfortable.”
About 1,100 of the 1,500 affected positions in the United States are part of Manheim, Cox said. Manheim moved to all-digital auctions in March to slow the spread of COVID-19, the illness caused by the coronavirus. Forty-five percent of the Manheim employees whose positions were eliminated worked part time, Talati said.
In June, Cox Automotive eliminated roughly 275 positions after furloughing more than 12,500 employees in the spring. Many of the company's furloughed employees worked for Manheim.
The auction unit has begun to reinstate in-lane bidding at several sites.
Cox Automotive responded to the coronavirus — which required many U.S. dealership showrooms to close under state orders — by cutting subscription fees for retail products, and it introduced new virtual features at its Autotrader shopping brand. But Cox also faces substantial economic headwinds from the pandemic, forecasting a 25 percent decline in revenue this year as a result, the company has said.
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 US$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.
On Tuesday, Schwartz said he will take on a new role within the Cox Enterprises organization, leading the Cox family's investments as CEO of the Cox Family Office. Steve Rowley, executive vice president of the Cox Business commercial unit, will take over starting Monday as Cox Automotive's president. Schwartz will continue as Cox Automotive's CEO until the end of the year while working on the leadership transition.
Cox Automotive said Tuesday it reinstated executive pay that had been cut for eight weeks during the pandemic.