Cox Automotive Cuts Staff, Focuses on 'Digital Services'

Matt Posky
by Matt Posky
cox automotive cuts staff focuses on 8216 digital services

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.”

From AN:

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.”

[Image: PRESSLAB/Shutterstock]

Join the conversation
  • Deanst Deanst on Jul 30, 2020

    “money is literally being printed to help support major players in the economy we stopped for several months as a “precaution.”” Well, it’s actually being electronically created through accounts held by the major banks at the Fed, but I get you point.

  • ToolGuy ToolGuy on Jul 30, 2020

    If you ever get the chance to attend a major regularly-scheduled automotive auction as a guest, take it - it is thoroughly fascinating. (The first time I ever went, the friend hosting me pointed out an individual who would regularly sit between two auction lanes and bid *on both lanes* simultaneously. As a newbie, it is tough to keep up with what is happening in one lane.) [Manheim has a very impressive prep system (clean-up, minor repairs, paint/body) for incoming vehicles.]

  • MaintenanceCosts We hear endlessly from the usual suspects about the scenarios where EVs don't work as well as gas cars. We never hear the opposite side of the coin. From an EV owner (since 2019) who has a second EV reserved, here are a few points the "I road trip 1000 miles every day" crowd won't tell you about:[list][*]When you have a convenient charging situation, EV fueling is more convenient than a gas car. There is no stopping at gas stations and you start every day with a full tank.[/*][*]Where there are no-idling rules (school pickup/dropoff, lines for ferries or services, city loading, whatever else) you can keep warm or cool to your heart's content in your EV.[/*][*]In the cold, EVs will give you heat from the second you turn them on.[/*][*]EVs don't care one bit if you use them for tons of very short trips. Their mechanicals don't need to boil off condensation. (Just tonight, I used my EV to drive six blocks, because it was 31 degrees and raining, and walking would have been unpleasant.)[/*][*]EVs don't stink and don't make you breathe carcinogens on cold start.[/*][*]EV maintenance is much less frequent and much cheaper, eliminating almost all items having to do with engine, transmission, or brakes in a gas car. In most EVs the maintenance schedule consists of battery coolant changes and tire maintenance.[/*][*]You can accelerate fast in EVs without noisily attracting the attention of the cops and every passerby on the street.[/*][/list]
  • MaintenanceCosts Still can't get a RAV4 Prime for love or money. Availability of normal hybrid RAV4s and Highlanders is only slightly better. At least around here I think Toyota could sell twice the number of vehicles that they are actually bringing in at the moment.
  • Tree Trunk Been in the market for a new Highlander Hybrid, it is sold out with order time of 6 months plus. Probably would have bit the bullet if it was not for the dealers the refuse to take an order but instead want to sell from allotment whether it fits or not and at thousands over MRSP.
  • AKHusky The expense argument is nonsense. My mach e was $42k after tax credit. Basically the same as similarly equipped edge. And it completely ignores that the best selling vehicles are Rams, F150s, and Silverados, all more expensive that a bolt, MAch e or ID4. As an owner, I'd say they are still in second car territory for most places in the country.
  • Johnster I live in a red state and I see quite a few EVs being purchased by conservative, upper-class Republicans (many of them Trump-supporters). I suspect that it is a way for them to flaunt their wealth and that, over time, the preference for EVs will trickle down to less well-off Republicans.