Rental car firm Avis Budget Group redundancies puts 800 jobs on the line
Monday, 13 July 2020
Despite receiving millions in wage subsidies from the Government, international rental car firm Avis Budget Group says redundancies are inevitable as it struggles to cope with the impacts of Covid-19.
Avis Budget Group, which was owned by American firm Avis Budget Car Rental, operated Avis Rent A Car, Apex Car Rentals and Budget Rent A Car in New Zealand.
The company said in a statement travel restrictions and “nervousness about domestic travel” had hit its airport business particularly hard, slowing its recovery.
The company did not say how many jobs would be lost, however, the company employed about 800 people in New Zealand across its three rental car businesses.
The company said it had started a consultation process with staff on “several proposals” regarding its three brands.
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“Unfortunately, what has become clear is that any kind of business recovery is going to be slower than initially anticipated, which means regrettably, we will require fewer people than we employ currently.
Have you been impacted by the restructure? Get in touch: email anuja.nadkarni@stuff.co.nz.
“This will mean that some NZ employees’ roles are at risk of redundancy. We are deeply saddened to be taking this step and do so fully aware of the impact it will have on our operational employees.”
The wage subsidy register showed Avis Rent A Car received $3.6 million in wage subsidies for 548 staff and $2.3m for 535 staff from the wage subsidy extension.
Apex Car Rentals received $1.3m for 208 staff from the wage subsidy and $785,000 for 176 staff from the extension.
Stuff Limited, publisher of this website, had received $6.2m in wage subsidy for 907 staff.
“There is great uncertainty surrounding border openings, international travel and the overall global economic outlook. We expect corporate travel to be significantly reduced for an extended period of time and, as an isolated long-haul destination, we expect the recovery of international tourist numbers to be long,” the statement said.
“In New Zealand, we have frozen discretionary expenditure, placed projects on hold, negotiated with landlords and airports, de-fleeted with vigour, and accepted the government wage subsidy for all eligible staff – among many other actions.”
A report released in June by the Government predicted job losses within tourism could peak at 92,000 this year.
Economic losses from Covid-19 in the tourism sector over the next four years were estimated at $18 billion to $21b of GDP.
A domino effect was already evident, with insolvent tourism operators unable to pay their suppliers and smaller businesses supporting major operators also compromised.