Hertz lays off 4000 more staff worldwide

19 January 2009

Hertz Global Holdings owner of Hertz car rental and Hertz Equipment Rentals Co (HERC), said it will lay-off more than 4000 employees during the final quarter of 2008 and the first quarter of this year.

The job losses, which follow the loss of 2700 jobs in the year to the end of September 2008, will be at both the car and equipment rental businesses and is part of a "comprehensive plan to further decrease costs... attributable to reduced rental demand".

By the end of the first quarter the group as a whole will have 32% fewer employees than in August 2006. Hertz said the workforce reduction would generate annual cost savings of between US$150 million and $170 million in 2009.

Mark P Frissora, Hertz chairman and chief executive officer, said, "Volume, pricing and residual values continued to decline during the most recently completed quarter, and we cannot predict when our markets will improve. As a result, we continue to take aggressive action to align our costs, including wage and benefit expenses, with business conditions... We are committed to our global airport and off-airport car rental and equipment rental businesses, and we are prepared to add necessary resources when the operating environment improves."

Meanwhile, Hertz told the Auto Analysts of New York Conference in Detroit on 14 January that it continued to pursue international growth opportunities for its equipment rental business, with the Middle East being one current target market, with both acquisitions and joint venture opportunities being investigated for this year.

At the same event, HERC president Gerry Plescia said Barack Obama's proposed economic stimulus package would have a positive impact on the equipment rental business in the US but not until the third and fourth quarters of this year. Government projects and publically funded bridge and highway jobs represent around 6-8% of HERC's revenues, said Mr Plescia.

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