Avis Europe, which is headquartered in Britain, has confirmed it is cutting over 300 jobs, raising prices and closing some branches.
"We have recently implemented a significant price increase in non-contracted rentals for 2008 across virtually all markets in Western Europe and a further increase for 2009 rentals," it said in its interim statement published this morning.
"We now expect the impact on fleet costs to be greater than anticipated in the second half of the year.
"With considerable uncertainty in fleet markets, we are now extending vehicle holding periods in certain circumstances."
The company is now "intensively" managing its fleet levels, together with the "enforcement of a rigorous recruitment freeze, faster release of seasonal staff and significant cuts in discretionary expenditure".
It also confirmed it is making 315 positions redundant; closing some low-margin locations; and transfering staff within the UK.
CEO Pascal Bazin said: “We have taken decisive action to raise pricing, reduce costs and maintain flexibility.
"Together with the ongoing improvements in our product and customer service levels, these actions will help position the business for the likely continued difficult conditions in 2009 and also for the longer term.”
Meanwhile, Helphire has blamed the dramatic increase in fuel prices earlier this year, which resulted in motorists cutting back on car use for its poor performance.
The high fuel prices had a knock-on effect of reducing the number of crashes, which in-turn meant there was less demand for credit hire for replacement vehicles.
Helphire is now reducing vehicle acquisitions and extending the holding period of its existing fleet. It is also hiring vehicles on short-term contracts to fleet customers.