Cox Automotive will furlough more than 12,500 employees internationally later this month, roughly 10,000 of which are in the U.S., the company said in a statement provided to Auto Remarketing.
Cox Automotive is starting the furloughs May 17. They will last for up to 16 weeks. The company emphasized “those furloughed will remain employees of Cox Automotive throughout the furlough period and will retain their existing health care benefits, paid entirely by Cox Automotive.”
Close to 87% of those furloughed in the U.S. are with Manheim, and most of those people are part-time drivers for the auctions or employees providing sale-day assistance at auctions.
The Manheim cuts are “due to the sharp declines in wholesale transactions and a necessary move to an all-digital format at all Manheim auctions in the U.S.”
Included in the total sum are approximately 4,600 full-time employees throughout the Cox Automotive business lines, who are being furloughed “because they are unable to substantially perform their duties from home and/or whose current workload has been significantly reduced,” the company said in a statement.
“A furlough is different than a layoff, and our hope is that we will be able to have as many of these people back as soon as conditions allow. We know, though, it is impossible to predict the course or duration of this pandemic and whether any of the furloughs will become permanent,” President and CEO Sandy Schwartz said in an internal email obtained by Auto Remarketing.
“I could say a lot of things about this being the best-case scenario, but nothing will change that furloughs and pay cuts are painful and represent real sacrifices for many families,” he said. “We don’t take lightly the broad impact these actions will have on everyone; the toll from COVID-19 is already so high, and this adds more uncertainty. If there were another way, I promise we would have done it.”
The company is making several other cost-reductions, as well.
Schwartz and Alex Taylor, CEO of parent company Cox Enterprises, are foregoing their full base salaries during the pandemic.