By on April 7, 2016

Chip Perry

When TrueCar president and CEO Chip Perry announced a revamp of the car-shopping site, he failed to mention one big change: layoffs.

According to a source and confirmed by TrueCar, an undisclosed number of the company’s employees — mostly located at its headquarters in Santa Monica — received layoff notices yesterday.

TTAC learned some employees in TrueCar’s development team received layoffs, according to a source. However, when asked, TrueCar would not detail the departments affected nor the number of employees laid off.

According to company spokesperson Carly Schaffner, the layoffs are part of a corporate realignment.

“We are constantly evaluating ways in which we can better serve car buyers, dealers and automakers. We recently determined that organizational changes were necessary to more closely align our workforce with the needs of the business,” said Schaffner.

“While we intend to add employees in certain areas of the company — most notably to our dealer sales and service group — a determination was made that reductions were needed in other areas. Regrettably, this has resulted in the elimination of a number of positions, mainly in our Santa Monica office. We are grateful for the service of all our employees and will work to make this transition as seamless as possible.”

The layoffs closely follow Perry’s pledge to dealers that outlined a list of changes to improve transparency for customers while bringing dealers onside.

“Our goal is to provide the best value for car buyers and dealers among all third-party automotive sites, but it was apparent to me that there were aspects of TrueCar’s service that were suboptimal,” Perry said at the time.

TrueCar has not been immune to controversy as of late.

A group of 100 dealers launched a lawsuit against TrueCar last year, claiming the company engaged in “deceptive business practices” by not disclosing the $299 and $399 dollar fees paid by dealers for new and used car sales brokered by TrueCar.

AutoNation, one of the largest dealer groups in the United States, broke off its relationship with TrueCar in July 2015, reportedly because TrueCar wanted extensive access to AutoNation’s sales data.

In August 2015, then-CEO Scott Painter announced he would leave the company toward the end of 2015. He was replaced by Perry, a former AutoTrader CEO, in November 2015.

TrueCar stock has plummeted from $16.13/share a year ago to $5.22/share at today’s open, representing a loss in value of more than 66 percent.

[Image: TrueCar]

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30 Comments on “TrueCar Employees Hit With Layoffs Amid Revamp...”


  • avatar
    CoreyDL

    Chip Perry is as tall as the trees! He could get a job as a giant on Game of Thrones.

  • avatar
    SCE to AUX

    Maybe now they can reduce their fee to $199.

  • avatar

    “We are constantly evaluating ways in which we can better serve car buyers, dealers and automakers. We recently determined that organizational changes were necessary to more closely align our workforce with the needs of the business,” said Schaffner.

    ———-

    A more generic PR-manufactured layoff explanation, there is not!

    • 0 avatar
      raph

      Tru’Dat!

      I wonder if they are going to try and fill the ranks in other departments that need to grow with the staff laid off or go for new hires with lower compensation.

      Always the “calculus of war” so to speak. Do you retain employees with experience but in a more costly compensation bracket or do you hire new people along with the costs associated with interviews and background checks and whatever else is involved in the hiring process but in the beginning are cheaper compensation wise.

    • 0 avatar
      indi500fan

      “there were aspects of TrueCar’s service that were suboptimal”

      You need to go to MBA school to master that lingo…..

    • 0 avatar
      Felix Hoenikker

      When I started working in big corporations in 1980, HR was a very different place. They acted normally, and spoke normally. But this was a kinder and gentler time in US business.
      In fact, back in the day, a lot of the HR staff were there to do penance for screwing up their previous positions. I remember employee announcements in the company newsletter that so and so had transferred to HR. The universal response to this was “I wonder what he did!”
      During the 90’s a new breed of HR staffer emerged from the morass. these guys were slicker and probably would have been good used car salesman. As HR sought ways to abandon their old role and join the newly minted MBAs, they started talking more and more like the stilted, meaningless statement above.
      I don’t have to deal with this anymore, but I pity the younger people that do.

  • avatar
    stevelovescars

    I wonder if any of these lead-generation sites actually drive much business to dealers? I tried some when selling my personal car and never got a single call from Autotrader or Cars, eBay and Craigslist got me more contacts and I ended up selling it from a free CL posting. As a consumer, I rarely look on those sites… If I want to see overpriced dealer cars I can find them more easily elsewhere.

    When I worked in auto retail, I pointed out that we received fewer than 2 leads per month (and no sales) from our $6,000 monthly Autotrader investment. Despite the data, our sales management continued to spend on Autotrader.

    Chip Perry built a very aggressive field sales organization but their website was pretty useless if you looked at it. It looks like he’s following that model again based on the article… expanding sales and laying off site development folks.

    We ended up putting cars on eBay and Craigslist and getting a lot more leads for a LOT less money (free in the case of CL, but it was time consuming). I understand that they have a more formal dealer listing service now.

    • 0 avatar
      Kyree S. Williams

      Same here. In fact, I built a web application that pulled in a feed of our cars from Dealer.com and generated Craigslist posts detailing the specs, features, price, anticipated monthly payment and terms, and a ZIP folder of relevant pictures. It generated roughly 63% of our traffic volume and 40% of our sales after a while. Mind you, our two main car dealerships were Mitsubishi and Kia and these were pre-owned cars, so we catered to a lot of subprime buyers who would scour Craigslist for affordable vehicles. I imagine that a premier dealership might have more trouble selling its wares on Craigslist.

      As far as that formal dealer-listing service, it’s $5 per automotive ad for dealerships posting on Craigslist (although it’s free for motorcycles and we did have a Yamaha dealership). Unfortunately, management decided to slash the Craigslist budget and sales took a major fall.

      • 0 avatar
        stevelovescars

        I worked for a Lexus dealership, so not sub-prime, and we only posted used cars on CL and eBay. The cars had very very (ludicrously) high asking prices (old school sales management) but we still got more leads than we ever did from Autotrader, new OR used.

        In the rare instance when we had an older low-mileage car for sale, we got great margins selling out of state on eBay (we were in California so these were very clean cars).

        The issues with Craigslist back then weren’t just related to the manual listing process. I tried a listing tool to automate listings from our DMS but people on CL would flag them if they looked too “formal.” I just made something simpler by cutting and pasting on the site. It didn’t take much time and I didn’t list all of the cars, anyway. At one point, our listings were ghosted, meaning they looked like they were live in our account but invisible to people searching on the site. Without the formal dealer listing service there was no easy way to get help and stop this from happening. Sounds like it would easily be worth $5 per car to get a modicum of support and to keep listings from getting flagged.

        Interestingly, when I recently sold my used car I got a ton of spam and fraud attempts within minutes of posting on CL. The site is still a sesspool, but I have a bit of an addiction to looking on there. I’ve found some great bargains and met decent people when selling there as well.

        • 0 avatar
          Kyree S. Williams

          Very interesting, especially the part about people flagging the posts. We never really had that happen—probably because Craigslist wanted our revenue, like you said—but we did get in trouble a few times because our posts were not compliant with local dealership advertising rules, so I had to familiarize myself with those. We also had competing dealerships steal our photos for similar cars they had. If they had a silver 2012 Maxima, they’d use photos we had of a blue 2012 Maxima, and then tell the buyers when they showed up that the photos were stock (they weren’t) didn’t represent an actual car in order to explain the color and options discrepancies. I started putting watermarks in the photos.

          There’s no way to post to Craigslist via API. I could have left a computer up that would run macros and automate the posts, but that was against Craigslist’s terms of service, and I didn’t want us to lose access to the platform.

          My program, then, was also cut-and-paste. It would simply generate a post (title, location, content, price, etc) and the ZIP file of pictures. When the salesmen weren’t doing anything, we’d have them copy and paste the content onto Craigslist, and upload the pictures. But that saved us a lot of time. Before I got there, the dealership was taking 15 or 20 minutes per car to write personalized, all-capitalized, buzzword-filled advertisements a la BigTruck. I figured that buyers didn’t care how “SPECTACULAR” or how much of a “SCREAMING DEAL” a car was, and that they just needed to be aware of it, and would want to know basic information about it. That made it easier to automate the content creation.

    • 0 avatar
      Jimal

      Same here. Despite all the data to the contrary (that manufacturer sourced leads were the only leads worth anything) we continued spending $15k/month on Autotrader and Cars.com.

      Glad I’m out of there.

  • avatar
    Fred

    When I shopped my Acura Sportwagon a couple years ago, the data from Truecar didn’t look right, basically saying everyone paid retail for them. How could that be on such an unpopular car? So without people to work up this data I assume Truecar will be even worse. They have been showing the same tv commercial for over a year now. To that may I suggest a Truecar death watch?

  • avatar
    APaGttH

    It appears to be USAA car buying service dropped TrueCar. I just bought (used) and no TrueCar info unlike a year ago when I was looking.

  • avatar
    boom

    40 people laid off, an unofficial count. Likely more. Mostly, if not entirely, in Technology, it seems. Entire teams were let go.

  • avatar
    28-Cars-Later

    “corporate realignment”

    Get used to this phrase.

  • avatar
    Jack Denver

    The “revamp” is supposed to make the site more dealer favorable by giving consumers less information about pricing, incentives, etc. This is like training your mule not to eat. Just when they get the site to the point where dealers really love it (when it provides NO useful information to consumers, just dealer provided marketing fluff), the # of consumers logging on will hit zero.

  • avatar
    Dave M.

    TrueCar lost their mojo about 5 years ago. I’ll still msrp a car out on there, but their prices are inflated compared to what people are paying on the ground.

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