On June 12, the Santa Monica, California-based business said it would eliminate 102 jobs or 24% of its workforce. TrueCar is also appointing COO Jantoon Reigersman as its new CEO to turn around the struggling vehicle listings company as part of a restructuring.
COO Reigersman, succeeds CEO Mike Darrow, who also resigned from his board post. In March 2022, Reigersman started working as the COO. But, from January 2021 to February 2023, he also served as CFO. Before that, he served as CFO for the diverse Internet, media, and e-commerce company Leaf Group.
However, Darrow concentrated on measures he claimed would boost TrueCar’s faltering finances during the company’s May 9 first-quarter results call. They included the TrueCar Wholesale Solutions subsidiary’s April debut as a market-based used car appraisal provider, the continuous development of the TrueCar+ digital platform, and initiatives to increase traffic to dealership sales.
Barbara Carbone, the new board chair of TrueCar, claimed that restructuring would help the business more effectively balance costs and income and be “designed to make TrueCar a nimbler, more efficient company.”
Shareholders reacted positively to the news, propelling TrueCar shares up more than 12% to $2.78 in after-hours trade. The company notes, excluding stock-based compensation, employee costs will decrease by more than $20 million annually due to job losses and the reorganization of its leadership structure.
According to TrueCar, it will incur restructuring costs totaling $7 million in the second and third quarters, excluding stock-based compensation. These costs include severance payments and one-time employee perks. According to a regulatory filing, most of the plan will be finished by the third quarter.
The business anticipates the fourth quarter to be either profitable or break even in adjusted profits before interest, taxes, depreciation, and amortization.