U.S. car rental company Hertz Global Holdings Inc. announced on Monday it plans to lay off 10,000 workers in its operations in North America to reduce expenses in the face of the pandemic's economic effects.
As of Dec. 31 last year, the company had around 38,000 staff, of which 29,000 were assigned in facilities in the United States. The firm, which has billionaire capitalist Carl Icahn as its biggest stockholder, will sustain around $30 million in termination costs for workers, Hertz stated in a regulatory documents.
The job cuts took effect on April 14 for workers who were not union members, and effective April 21 for union staff, Hertz disclosed. Hertz Global is the parent of The Hertz Corp., a rental car company that operates Hertz, Dollar and Thrifty brands.
Hertz did not include specific information about the number of local workers impacted by the lay offs. The organization had around 1,100 staff in Southwest Florida prior to the pandemic.
As a result of the effects of the health crisis on travel demand, Hertz Global Holdings has initiated aggressive measures to manage costs and cut capital expenses, the company disclosed in an 8-K filing with the Securities and Exchange Commission.
Hertz expects to include around $28 million in severance or termination payments and around $2 million more in benefits cost mainly related to health care. The company stated in March that it was carrying out furlough programs across the company's North America facilities to cope with depleting demand for its services.
Like the rest of the travel sector, the pandemic's negative effects on Hertz came very fast, and the reversal in client demand has been huge, Chief Executive Officer Kathryn Marinello said. Hertz also said that it hoped to bring back as many members as possible once the global travel normalizes.
Hertz's earlier measures to mitigate the pain included changing fleet rates in reaction to decreased demand for travel, moving gears by focusing on sales and marketing game plans to be more in sync with the current economic climate, and merging local rental sites in the US and Europe, providing alternate pick-up points for clients, where possible.
Top executives of the company took a major cut in pay along with the earlier furloughs, with chief executive Kathryn Marinello giving up her entire paycheck.
Marinello had received over $8 million in total pay in 2018, the regulatory filings disclosed. This included a $1.45 million base pay which remains the same under a new employment deal she signed in November.
