TrueCar’s Strategic Restructuring: 102 Job Cuts and a New CEO

ByLA STARTUPS

TrueCar, a platform that enables users to research new and used car prices and find local dealer savings, has announced a significant restructuring that includes laying off 24% of its staff, and approximately 102 employees. This move comes as part of a broader strategy to align the company’s cost structure with its revenue base, making it a more efficient and agile entity.

The company’s President and CEO, Michael Darrow, is stepping down from his executive roles and his position on the board. He will be succeeded by Jantoon Reigersman, who has previously served as TrueCar’s chief operating officer and chief financial officer. The announcement of the restructuring led to a nearly 13% jump in TrueCar’s stock in after-hours trading.

Barbara Carbone, the incoming chair of the board, stated that this difficult decision was made after an extensive review and is necessary for TrueCar to achieve its strategic priorities and create long-term shareholder value. The restructuring is expected to result in nonrecurring cash payments of about $7 million, which will be reflected in the second and third quarters of 2023, and an annualized reduction in expenses exclusive of stock-based compensation of over $20 million.

As of May 31, 2023, TrueCar had cash and cash equivalents of $146.5 million. The company anticipates that this number will drop below $125 million in the near term, but it continues to expect break-even or positive adjusted EBITDA and double-digit year-over-year revenue growth in the fourth quarter of 2023.

TrueCar’s first-quarter earnings also showed a dip in revenue and an increase in cost. The company closed Q1 with nearly $37 million, down from $43.5 million in the same period last year. Net loss hit $19.5 million, up from $12.4 in Q1 2022.

Founded in 2005, TrueCar aimed to revolutionize the car-buying process by making it more transparent and efficient. Despite facing legal issues and challenges from dealerships threatened by the company’s model, TrueCar continued to expand, acquiring new businesses and going public in 2014 under the ticker TRUE.

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