Avis Budget Rent-a-Car retrenchment consultations to impact nearly half of employees

Nearly half of the employees of Avis Budget Rent-a-Car, part of Barloworld Group [JSE: BAW], will be affected by a retrenchment consultation process, according to an internal memo seen by Fin24.

Last week, in a notice to shareholders, the logistics and fleet management group Barloworld said it would implement group-wide retrenchments, due to the impact of trade restrictions and lockdowns instituted to slow the spread of the coronavirus.

Barloworld, established in 1902, is known for logistics management services, fleet management and the distribution of equipment.

Significant staff reductions are expected in the group’s Automotive and Logistics division, its Equipment Southern Africa division and the Corporate Centre. The group has also implemented a 12-month remuneration sacrifice plan, which was implemented from 1 May. The plan will see salary reductions on a sliding scale, for certain employees at higher pay grades.

Barloworld is further suspending contributions to its retirement fund for a period of 12 months.

Fin24 understands that 978 employees out of 2036 at Avis Budget Rent-a-Car will be impacted by the retrenchment consultations. 

“Revenue is not being generated and there has been a substantial reduction in the business activities and operations in Avis Budget Rent-a-Car,” the memo read.

A significant portion of Avis Budget Rent-a-Car’s business is driven by the airport market, and supplemented by an off-airport offering. “The closing of borders and subsequent lockdowns impacted operational activities, with fleet utilisation declining from over 75{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} before the pandemic to below 30{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2},” it said in a shareholder notice.

Barloworld said at the time that activity is improving on the back of the easing of lockdown restrictions.

In response to questions on the matter, Barloworld referred Fin24 back to its feed on the JSE Stock Exchange News Service. 

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