Car rental giant Avis Budget Group announced on Thursday that it had reduced its workforce by more than 2,200 jobs as part of its plan to meet the company’s goal of cutting its yearly operational costs by $150-200 million by mid next year.
In after-hours trading on Friday, Avis shares gained 6 cents, up to 75 cents, on the company’s announcement of the status of its cost containment program. During the regular session, shares dropped by 12 cents, down to 69 cents. Over the past 52 weeks, the group’s stock has traded in the range from 38 cents to $18.
“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,” commented the chairman and chief executive of the Avis Budget Group, Ronald L. Nelson in a prepared statement.
“Nevertheless,” he went on to say, “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.”
Over the past several weeks, Avis reports having frozen the salaries of management, downsized its fleet plans and cut over 2,200 jobs. The company noted that it offered buyouts to employees before resorting to involuntary reductions.
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