The newly private TrueCar Inc. laid off 30% of its employees, effective immediately upon an announcement released last Tuesday.
Of the approximately 400 workers at the Santa Monica-based car shopping platform, under 100 were let go across its offices. While no specific part of the business was targeted, TrueCar founder and Chief Executive Scott Painter said that the dealer team might be hit the hardest, with almost half of its members leaving the company.
“There’s no question that as a private company, we don’t have the option of being profitable. We have to be profitable,” Painter said in an interview with the Business Journal. “I don’t think it’s any surprise that we decided to rationalize the size of the business … I really wanted to find not just the people who are competent, but aligned and passionate, ready to run through walls to make things happen.”
New year, new TrueCar
The layoffs resulted from Painter’s efforts to restructure the company, which he bought back early this year, resuming his role as chief executive after 10 years and taking it off the public market at $227 million. TrueCar announced in February that it is shifting away from TrueCar+, TrueCar Wholesale and the TrueCar Marketing Solutions and will instead integrate parts of the three initiatives into its core platform, reassigning employees to various teams around the new focus.
“[The three initiatives] created a little bit of confusion with our dealers wondering whether or not we were going to be getting into their business … over half of the company’s resources were being directed towards these three initiatives,” Painter said. “By stopping those things and focusing back on core, we get all that time back.”
Painter’s objective is to turn the tides at the company, which reported millions of losses before he took over. The new strategies include collaborations to bring the company in line with current technologies. Earlier last month, TrueCar announced a multi-year partnership with automotive AI solutions provider Augmented Reality Concepts, Inc., also known as Impel, providing its own AI agent to certified dealers and embedding sales agents in TrueCar marketplace.
“As TrueCar enters this new chapter as a private company, it creates the perfect opportunity to deploy a fully AI-native marketplace experience for the 11,500 dealerships and the millions of shoppers they serve,” said Devin Daly, Impel co-founder and chief executive, in a statement. “By pairing our autonomous AI agents with TrueCar’s expansive network, we are set to deliver a high-performance experience that redefines the car-buying model for the digital era.”
And the new year seems to bring hope: with tariffs struck down in February, car dealerships are facing less supply-chain disruptions and shortage of car-building materials. Painter said that the company was ready to post “first quarterly profit in its history at the end of March.”
“TrueCar has been losing $20-to-$30 million a year for the last five years. That’s over,” Painter said. “We are able to forecast now that we will deliver our first quarter of profit in the company’s history, real profit, free cash flow. That is the basis from which everything starts to change.”
