Hertz Global Holdings' Leadership Restructuring: Strategic Leadership and Operational Turnaround Potential

Hertz Global Holdings' 2025 leadership changes and operational restructuring efforts reflect a company in transition, balancing aggressive cost-cutting with the need to rebuild credibility in a volatile market. Under CEO Gil West, the firm has launched the "Back-to-Basics Roadmap," a strategy centered on disciplined fleet management, revenue optimization, and cost efficiency. Early results suggest progress, but lingering financial vulnerabilities and external risks cast doubt on the sustainability of its turnaround.

Strategic Leadership: A Mixed Bag of Moves

Hertz's leadership reshuffling in 2025 underscores its focus on financial and operational precision. The appointment of Mark Kosman as Chief Accounting Officer, for instance, aligns with the company's emphasis on refining cost and fleet management, according to a Sahm Capital analysis. However, the departure of Eric Leef, Executive Vice President and Chief Human Resources Officer, signals instability in key leadership roles. Christopher G. Berg, the Chief Administrative Officer, will temporarily oversee HR functions during the search for a successor, raising questions about continuity in talent strategy as noted in a MarketScreener release.

West's leadership has prioritized fleet modernization, with the "Buy Right, Hold Right, Sell Right" approach driving a 45% year-over-year reduction in vehicle depreciation and a fleet where 70% of U.S. vehicles are 12 months old or newer, according to Hertz's Q1 2025 report. These moves have improved direct operating expenses by nearly $92 million year-over-year, per the company's first-quarter 2025 report. Yet, the resignation of a senior HR executive amid a broader leadership transition highlights the challenges of maintaining cohesion during a high-stakes restructuring.

Operational Turnaround: Progress and Pitfalls

Hertz's operational strategy has delivered measurable gains. The company's DPU (depreciation per unit) fell to $251 in Q2 2025, a 58% drop from $595 in the same period in 2024, surpassing its target of sub-$300, according to Panabee. This success stems from accelerated fleet rotation, including the retirement of older vehicles and a strategic reduction in electric vehicle (EV) holdings, which now comprise less than 10% of the total fleet, as detailed in a BeyondSPX article. Vehicle utilization also improved, rising to 83% globally in Q2 2025, a 3 percentage point increase year-over-year per the Panabee analysis.

Financially, Hertz has raised $425 million through exchangeable senior notes, bolstering liquidity and signaling investor confidence in its transformation, according to Hertz's Q1 2025 report. However, these gains are offset by a narrowed net loss of $294 million in Q2 2025, driven by lower sales and residual value volatility (Panabee). Analysts caution that Hertz's high debt load-$17.6 billion as of June 2025-and negative stockholders' equity of $504 million remain critical risks (MarketScreener).

The Road Ahead: Balancing Ambition and Realism

Hertz's long-term goals-DPU below $300, revenue per unit above $1,500, and direct operating expenses in the low $30s-remain ambitious but achievable if current trends persist, per Hertz's Q1 2025 report. The company's focus on retail vehicle sales through its Hertz Car Sales channel has already contributed to record quarterly results, diversifying revenue streams beyond traditional rentals, as the same report indicates. Additionally, plans to enhance revenue management systems and expand off-airport and mobility services could further stabilize earnings.

Yet, external headwinds persist. Analysts highlight the fragility of used vehicle residual values, a key factor in Hertz's profitability, and the risk of rising interest expenses as debt maturities loom (MarketScreener). The recent $144 million quarter-over-quarter surge in non-vehicle interest expenses, driven by unrealized losses on debt instruments, underscores this vulnerability (Hertz's Q1 2025 report).

Conclusion: A Turnaround in Progress

Hertz's leadership and operational overhauls have generated momentum, but the path to sustained profitability remains uncertain. While the "Back-to-Basics Roadmap" has delivered early wins in fleet efficiency and cost control, the company must navigate a complex mix of financial obligations, market volatility, and leadership transitions. Investors should monitor Hertz's ability to maintain DPU reductions, secure favorable financing terms, and execute its retail sales strategy without compromising liquidity. For now, the jury is out on whether these efforts will translate into a durable turnaround-or merely delay an inevitable reckoning.

A historical analysis of Hertz's earnings release performance from 2022 to 2025 reveals limited predictive value for a simple buy-and-hold strategy. Across seven earnings events, cumulative returns over a 30-day window averaged slightly negative, with no statistically significant patterns on any single day. While win rates improved modestly beyond day 16, they remained below 60%, suggesting earnings announcements have not consistently driven directional price movements. Backtest results were derived from analysis of HTZ earnings release dates from 2022 to 2025.