TrueCar Inc. is laying off nearly a quarter of its work force and appointed COO Jantoon Reigersman as its new CEO to help the struggling vehicle listings company amid a restructuring.
The Santa Monica, Calif., company said Wednesday that it will cut 102 positions, or 24 percent of its work force. Reigersman, 41, replaces CEO Mike Darrow, 66, who also has left his board position.
Barbara Carbone, TrueCar’s incoming board chair, said in a statement that restructuring would help the company better align its costs with revenue “and is designed to make TrueCar a nimbler, more efficient company.”
Shareholders reacted favorably to the news, driving shares of TrueCar up more than 12 percent to $2.78 in after-hours trading.
The company said the job cuts and a realignment of its leadership structure will slash employment expenses by more than $20 million annually, excluding stock-based compensation.
TrueCar said it will incur $7 million in restructuring charges, excluding stock-based compensation, in the second and third quarters. Those expenses include one-time employee benefits and severance payments. Most of the plan will be complete by the third quarter, according to a regulatory filing.
The company said it expects to break even or have positive adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter.
TrueCar has been bleeding losses. In the first quarter, net losses grew to $19.6 million from a $12.4 million loss in the first quarter a year earlier and an $18.1 million loss in the fourth quarter.
The company made “this difficult decision after an extensive review” so TrueCar could “achieve its strategic priorities and create long-term shareholder value,” Carbone said. She also thanked Darrow for “his steadfast leadership and many contributions” to the company, including working as CEO permanently since 2020 and “through unprecedented challenges for our company and industry.”
Darrow, in a statement from TrueCar, said he was “proud of the groundwork that has been laid as the company’s transformation is underway.”
Darrow, who joined TrueCar in 2017, was appointed interim CEO of the company in May 2019, after then-CEO Chip Perry retired. He took that job after working as TrueCar’s executive vice president of manufacturer and affinity partner development and as president of the company’s ALG division.
“We are grateful to him for his passion and dedication to TrueCar over more than six years of service and wish him all the best,” Carbone said.
During the company’s May 9 first-quarter earnings call, Darrow focused on actions he said would improve TrueCar’s sagging finances. They included the April launch of TrueCar Wholesale Solutions, a subsidiary focused on providing market-based valuations for used cars, an ongoing expansion of the TrueCar+ digital platform and efforts to convert more traffic into dealership sales.
Reigersman began the COO job in March 2022. He also was CFO from January 2021 to February 2023. Before that, he was CFO for Leaf Group, a diversified Internet, media and e-commerce company. He also has experience as an investment banker at Morgan Stanley and worked in the special situations group at Goldman Sachs.