Cox Automotive Cuts Staff, Focuses on 'Digital Services'

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • 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.]

  • 3-On-The-Tree Lou_BCsame here I grew up on 2-stroke dirt bikes had a 1985 Yamaha IT200 2-strokes then a 1977 Suzuki GT750 2-stroke 750 streetike fast forward to 2002 as a young flight school Lieutenant I bought a 2002 suzuki Hayabusa 1300 up in Huntsville Alabama. Still have that bike.
  • Milton Rented one for about a month. Very solid EV. Not as fun as my Polestar, but for a go to family car, solid. Practical EV ownership is only made possible with a home charger.
  • J Love mine, but the steering wheel blocks dashboard a bit, can't see turn signals nor headlights icons. They could use the upper corners of the screen for the turn signals. Mileage is much lower than shown too, disappointing
  • Aja8888 NO!
  • OrpheusSail I once did. My first four cars were American made, and through an odd set of circumstances surrounding a divorce, I wound up with a '95 Nissan Maxima which was fourteen years old and had about 150,000 miles on it.It was drove better, had an amazing engine, and was more reliable than any of my American cars. This included a new '95 GMC pickup that went through five alternators in under two years while the dealership insisted that there was no underlying electrical problem while they tried to run the clock on the warranty.That was the end of 'buy American'. I've bought from Honda and VW since, and I'll consider just about anything except American now.