Dollar Thrifty to cut 400 jobs amid economic turmoil
(Reuters) - Dollar Thrifty Automotive Group Inc (DTG.N) cut its workforce by about 6 percent to cut costs amid tough economic conditions, in a move that will affect 30 percent of the car-rental company's senior management staff.
Companies in the car rental industry have been exploring contingency measures from operational improvements and job cuts to partnering with airlines and hotels, in response high fuel costs and a sharp drop in travel spending.
"Today's industry challenges have unfortunately required that we accelerate our efforts to realign our workforce and become more efficient," Dollar Thrifty Chief Executive Scott Thompson said in a statement on Thursday.
The job cuts, which will affect 400 employees, come a month after the company said it amended its credit agreements for 60 days to comply with the terms of its debt covenant.
The amendment was related problems in the third quarter with per day revenue and vehicle depreciation costs, as well as the bankruptcy of one of its tour operators.
The company expects the workforce reduction will result in a fourth-quarter charge of about $4 million for estimated cash severance payments. The move is expected to produce annual savings of about $15 million in the 2009 financial year.
Shares of the company closed at $1.42 Thursday on the New York Stock Exchange.
(Reporting by Biswarup Gooptu in Bangalore; Editing by Pratish Narayanan)
