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Car rental firm Avis cuts more than 2,200 jobs

Source: PTI
December 05, 2008 18:39 IST
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Car rental firm Avis Budget Group has slashed more than 2,200 jobs as part of its cost-saving efforts to tide over the deteriorating economic crisis.

The move along with other initiatives are expected to bring expenses by $150 to 200 million annually by the middle of next year.

In a statement on Thursday, Avis said it has frozen management salaries, adjusted the size and composition of its planned fleet and eliminated over 2,200 positions.

"Avis first offered most employees the option to volunteer for employment termination in return for an enhanced severance package.

With the number of volunteers falling short of the staff reductions necessary, the Company has effected the required number of involuntary staff reductions," the statement noted.

Further, the firm would close its claims processing facility in Orlando and the claims processing to be consolidated within other company offices or outsourced.

"In addition, the company's Wichita Falls, Texas, contact centre will be closed, with customer calls to be handled by third-party service providers or by the Companys Tulsa, Okla.and Fredericton, New Brunswick contact centers," the statement added.

Moreover, the company has initiated steps to revise or terminate certain unprofitable customer relationships and to close under performing off-airport locations.

"Since unveiling our five-point plan, we have taken immediate action and remain on track to lower our cost base by approximately $150 to 200 million annually by the middle of 2009, which is in addition to the $50 million in annual savings initiated in the third quarter," Avis Budget group chairman and chief executive officer Ronald L Nelson said.

"While these are difficult steps to take, we are committed to ensuring that we adjust our business in response to the economic conditions in which we are currently operating," Nelson added.

Meanwhile, Avis has asked the federal government to help the ailing auto industry.

"We also believe that additional government action is necessary to restore access to capital and liquidity and thereby enable the car rental industry to weather this difficult economic period without necessitating fleet reductions that could impact the industrys ability to meet the demand for rental vehicles.

"This would also help to minimise the potential need for the company to pursue additional staff reductions," Nelson pointed out.

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