About 35 percent of Autobytel’s employees, 75 positions, were eliminated last week as the embattled car-buying Web site continued company-wide cost-cutting initiatives started last year. The second step the company made was to contract with investment banking firm RBC Capital Markets.
It’s unclear what departments were affected by the 75 positions eliminated on Friday. A statement from the company said the reductions would “reinforce management’s previously announced commitment to improve cash flow and attain profitability.” While the company expects to save approximately $10 million annually as a result of the layoff, it will incur severance and other employee-related expenses of about $2.2 million in the second half of the year.
Autobytel operates a number of car-buying Web sites where consumers can find, see, buy, and learn about anything automotive. The sites include Autobytel.com, Autoweb.com, CarSmart.com, Autosite.com, CarTV.com, and MyRide.com. The company also generates leads for dealers and car companies on its AutoReach ad network and through relationships with ESPN.com, AOL, Edmunds, and Kelly Blue Book.
In February Autobytel launched Local Connect, a data-driven ad product to help local dealers gain leads. A month into its launch the sales team had only sold to a small number of its 3,700 franchise customers.
Autobytel was unable to provide comment by press time.
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