Hertz is reportedly considering layoffs after selling part of its electric vehicle fleet.
The car rental giant on Tuesday (Feb. 6) reported quarterly and year-end earnings showing that it lost an adjusted $1.36 per share, missing analyst projections of a 76-cent loss.
The earnings came weeks after Hertz announced it was selling 20,000 Tesla electric vehicles (EVs) — about a third of its fleet — saying that it was losing money on the cars.
Speaking to Bloomberg News, CEO Stephen Scherr said Hertz plans to save $250 million in other costs, which may include job cuts.
“The company clearly took on more EV exposure than where the market otherwise took us,” Scherr said. “The decision we made in the fourth quarter to make a pivot on EV sets us up for a transitional year that’s achievable. We’ll spring into 2025 a better company.”
“While electric vehicles have been celebrated for their potential to revolutionize transportation and accelerate the path toward a greener future, recent moves by original equipment manufacturers (OEMs) to scale down production, divest and cut funding have cast a shadow over this once-optimistic narrative,” that report said.
For example, Volvo last week announced it was no longer providing funding to Polestar, an affiliate company created with Volvo’s majority shareholder Geely through a special-purpose acquisition company merger in 2022.
According to the car company, the decision was partly rooted in its assessment of “current equity market conditions” and it will now redirect its efforts toward reducing EV costs by 40% as well as working on a “sound tech plan” to differentiate its software and artificial intelligence (AI) solutions in the competitive market.
Meanwhile, Ford has chosen to scale back production of its widely acclaimed battery-electric pickup truck, the F-150 Lightning, in response to the rising costs in the EV sector which led to a third-quarter 2023 loss of over $1 billion for Model e, its electric car division.