Chicago, Illinois-based online car-buying company, Cars.com, has announced that it will be laying off 126 employees to produce a ‘streamlined’ Cars.com’s field sales workforce as the company shifts resources from its online classified listings to broader digital offerings such as dealer websites and marketing campaigns.”
According to Cars.com CEO Alex Vetter, “We need to move from a generic sales model to a more specialized one. While it’s a reduction in our total field force, we’re also augmenting and building up our inside sales efforts. To get new dealers on the platform, we think we can do it cost effectively from our call centers.”
But the truth lies closer to the fact that activist investors such as New York City, New York-based Starboard Value are pressuring the company to improve its overall performance, especially in improving growth, revenues, and reducing operating costs.
As Chairman Scott Forbes noted, "We are confident in the Company's strategy to expand from a classified listings model into a leading online automotive marketplace solutions provider. We have undertaken a number of actions toward positioning the Company to drive growth and achieve sustainable market leadership in our sector. We remain committed to that plan, but in light of multiple inquiries which indicate the possibility of realizing that future value now, and after careful consideration, we took the decision to explore strategic alternatives in late 2018.”
“Strategic alternatives” is the code phrase for sale or merger.
There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?