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The layoffs will take effect April 14 for nonunion workers and April 21 for union workers, Hertz said in an 8-K filing with the SEC. The company expects to incur $30 million in costs related to the job cuts, including $28 million toward severance pay and $2 million toward benefits.
“As a result of the impact on travel demand, Hertz Global Holdings, Inc. and The Hertz Corporation ... have experienced increased rental cancellations and declining forward bookings,” Hertz said in the 8-K filing. “In response to these unprecedented conditions and the uncertainty regarding the duration of the impacts, Hertz has taken proactive and aggressive actions to manage costs and reduce capital expenditures.”
Transportation services came to a standstill in recent weeks after state and local authorities around the country imposed shelter-in-place orders to slow the spread of the virus. Travel-related firms, such as car rental services, airlines and hotels, have experienced a significant reduction in revenue as customers stay home.
Hertz’s total workforce included about 38,000 employees as of the end of 2019. Hertz and car rental rival Avis began cost-cutting measures in March as most of the U.S. economy shut down.
Hertz and Avis pressed the Trump administration last month to consider providing financial relief to rental car services. U.S. airlines received billions in relief funds to prevent layoffs through at least September, though several firms have asked workers to take voluntary furloughs.