May 23 (UPI) -- Hertz Global Holdings has filed for bankruptcy following a sharp drop in travel because of the coronavirus pandemic.
The company announced in a statement Friday that it has filed voluntary petitions for reorganization under Chapter 11, along with some of its U.S. and Canadian subsidiaries.
"The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings," the company said in a statement. "Hertz took immediate actions to prioritize the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity."
The company said that it has taken steps to reduce unnecessary spending, but it's unclear when it will recover, so the filing was needed "to strengthen capital structure."
Among the steps the company took to mitigate revenue loss from car rental cancellations, it reduced planned fleet levels, consolidated off-airport rental locations, deferred capital expenditures, and implemented furloughs and layoffs of 20,000 employees, or approximately half of its global workforce.
Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries are still open, the statement said.
"Hertz has over a century of industry leadership and we entered 2020 with strong revenue and earnings momentum," Hertz President and CEO Paul Stone said in the statement. "With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery."
The company said that as of the filing date, it had more than $1 billion in cash in hand for operations.
Hertz's principal international operating regions such as Europe, Australia and New Zealand were not included in Friday's U.S. Chapter 11 proceedings.