DOW JONES NEWSWIRES Avis Budget Group Inc. (CAR) has cut 2,200 positions, or about 7% of its work force, as it takes steps to reduce annual costs by $150 million to $200 million by the middle of 2009.
Shares shot up 17% to 81 cents in after-hours trading.
In addition to hiking retail car-rental rates, the company has frozen management salaries, taken steps to close unprofitable off-airport locations, and adjusted the size and composition of its planned fleet.
Avis plans to close its claims-processing facility in Orlando, Fla., and its Wichita Falls, Texas, contact center.
The company said it offered most employees a chance to leave in return for an enhanced severance package and used layoffs only when it lacked enough volunteers.
Rival Dollar Thrifty Automobile Group Inc. (DTG) has reduced its work force by 6% to combat current economic conditions and save about $15 million in the next year.
Car-rental companies have suffered along with the ailing auto industry. With the slow economy cutting into travel spending for consumers and businesses, car-rental companies have struggled to maintain revenue.
Chief Executive Ronald L. Nelson said Avis is encouraging Congress to provide billions of dollars to help stabilize the U.S. 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," he said.
Last month, Avis said it swung to a huge loss in the third quarter on a $1.3 billion write-down.
Standard & Poor's Ratings Service and Fitch Ratings both cut Avis' credit rating further into junk territory in October, citing long-lasting weakness in the auto industry and refinancing concerns.
Shares of Avis have tumbled more than 95% since June, while shares of rivals Hertz Global Holdings Inc. (HTZ) have lost 75% and Dollar Thrifty 90%.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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(END) Dow Jones Newswires
December 04, 2008 17:20 ET (22:20 GMT)

Publié le 04 Décembre 2008 Copyright © 2008 Dowjones