Edmunds, which offers online automotive reviews as well as car-buying services and appraisals, plans to lay off more than 100 employees, according to a notice filed with the state — and used-car retail giant CarMax Inc. announced Wednesday that it is buying a minority stake in the company.
Edmunds will cut 122 jobs in its Santa Monica headquarters, according to the Jan. 6 filing with the California Employment Development Department. The layoffs will take effect March 7 and are expected to be permanent.
Founded as an automotive pricing guide in 1966, Edmunds launched its website 25 years ago. The company’s business model hinges on advertising and lead referrals it sells to carmakers and dealers.
Like all digital media businesses, it faces pressure from Google and Facebook, which controlled nearly 60% of the U.S. online advertising market in 2018, according to consultancy PwC. Car-buying sites such as Kelley Blue Book and Carfax also compete for visitors.
A spokeswoman declined to say what departments the layoffs would affect, but she said the cuts do not signify a downturn in business.
Jamie Epstein, vice president of employment experience, said in a statement that the layoffs are part of a restructuring decision designed to allow Edmunds to “focus on its core revenue drivers, so we are in the most financially healthy position for future growth.”
Epstein said in the statement that Edmunds has invested in its website and product experience and will focus on upcoming initiatives that will produce immediate and long-term financial stability.
Richmond, Va.-based CarMax, in announcing its $50-million investment, hinted at using material from Edmunds to help attract customers and streamline the car-buying experience.
“Consumers trust Edmunds for its in-depth, expert-driven automotive editorial content and unbiased reviews. Edmunds has also made significant investments in digital innovations over the last several years that align with our continued focus on enhancing the customer experience online,” CarMax Chief Executive Bill Nash said in a statement.
Both companies declined to comment further on the CarMax investment.
Epstein declined to say how many employees remain in Santa Monica. Edmunds’ website says it “has about 400 employees, the majority of which work in the Santa Monica office.”
The company’s offices in Detroit will also be affected, but a spokeswoman decline to say how many jobs will be cut there.
“We are confident in our ability to maintain the fullest level of support and oversight of our products and services during this period,” Epstein said.