CarMax has announced it will furlough roughly 15,500 employees effective April 18 due to the coronavirus outbreak. In addition, executives will have their pay slashed.
Approximately half of the company’s 217 stores in the United States are either closed or operating on a limited basis. The majority of furloughed employees work at CarMax stores that are currently closed due to government mandates.
CarMax says it will provide transition pay to each impacted associate and for furloughed employees enrolled in its medical plan, the company will pay the current cost of the employees’ portion of the medical plan, plus the employer portion, until further notice.
“This has been a very difficult decision. Each and every one of our associates are incredibly important to us. We will not rest until we can start pulling our team back together,” CarMax president and chief executive Bill Nash said. “I believe that these steps will help our company withstand the current environment and successfully emerge from these difficult times.”
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Speaking of Bill Nash, he will forgo 50 per cent of his salary. In addition, each member of the company’s senior leadership team will take a reduction in pay until further notice. The CarMax Board of Directors has also unanimously determined to forgo their cash retainer indefinitely.
CarMax has also introduced a hiring freeze, will reduce inventory levels, slash marketing costs, and is ceasing store expansion activity and remodelling plans.
“We will continue to keep our stores open where permitted to support our customers’ essential needs for reliable vehicles and to provide as many jobs as possible for our associates,” Nash added. “For the safety of our associates and customers, we have implemented social distancing practices and enhanced cleaning measures in all locations. We are focused on positioning the company for a strong recovery when this crisis is over.”
CarMax is the largest used vehicle retailer in the United States.
