Ford Motor Co. (NYSE: F) is cutting 7,000 white-collar jobs – or about 10% of its global workforce – as part of the automaker’s broader plan to save costs. The company made the announcement on Monday saying it will let go about 800 workers in the U.S. between now and August.
Ford has already made nearly 1,500 voluntary buyouts in the United States. About 500 employees will be laid off this week. Most cuts in the first round will affect workers at the company’s headquarters in Dearborn, Michigan.
The company will begin the fourth wave of the restructuring on Tuesday, and expects to finish the majority of layoffs by May 24. Ford hopes to see 7,000 involuntary and voluntary separations across the globe by the end of August.
Ford CEO Jim Hackett believes the layoffs are necessary to prepare for the future, because the automaker faces massive capital expenditures to update and develop its current vehicles for the future.
“To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts,” Hackett said in an email sent to employees.
The company projects the plan will save about $600 million a year by increasing the number of employees reporting to each manager and eliminating bureaucracy.
“As we have said, Ford is undergoing an organizational redesign process helping us create a more dynamic, agile and empowered workforce, while becoming more fit as a business. The majority of the redesign is now complete for North America and will be concluding in other regions by August. This work has resulted in some separations of salaried employees and the reassignment of others,” an official statement from Ford read.
“By the end of the process in August, we expect to have eliminated about 7,000 salaried positions or about 10% of our global salaried workforce. Within that total, and consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20% which will result in annual savings of about $600 million,” the statement continued.
President Donald Trump, who campaigned on reviving U.S. auto sector employment, has time and again blasted car makers for cutting jobs. Shares of Ford were off 0.58% to $10.23 as of 11:51 a.m. ET.
Ford Company Profile
Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. The company has about 14.3% market share in the United States and about 7% share in Europe. Sales in North America and Europe made up 65% and 21% of 2018 auto revenue, respectively. Ford has about 199,000 employees, including 55,400 UAW employees, and is based in Dearborn, Michigan.