PARSIPPANY, NJ (AP) - Car rental company Avis Budget Group Inc. said Thursday that it has cut more than 2,200 jobs and taken other steps to meet its goal of reducing annual costs by $150 million to $200 million by the middle of 2009.
Avis shares advanced 6 cents, or 8.7 percent, to 75 cents in after-hours trading when the status of the program was announced, after dropping 12 cents, or 15 percent, to 69 cents during the regular session. The stock has traded between 38 cents and $18 during the past 52 weeks.
"We're pleased with our progress to date, which when combined with the steps taken in the third quarter, will allow us to enter the new year with more than $150 million of incremental cost reduction flowing through our income statement," said Avis Budget Group Chairman and Chief Executive Ronald L. Nelson in a statement.
"Nevertheless," he added, "it is our intention to continue our relentless focus on cost containment even if and when economic conditions improve, so that we can achieve our ultimate goal of restoring our margins to previous levels."
In the past weeks, Avis said it has frozen management salaries, downsized its planned fleet and cut more than 2,200 jobs across its business. Avis said it offered buyouts before turning to involuntary staff reductions.
The company will also close its claims processing facility in Orlando, Fla., as well as its customer contact center in Wichita Falls, Texas.
Avis recently announced an increase in rates for most car rentals of $3 per day and $20 per week, which took effect Monday. The company has also closed some underperforming off-airport locations.
In its statement, Avis urged the federal government to take steps to bolster liquidity in vehicle financing markets. Nelson said government action would help minimize the potential need for further job cuts.
Full Story
