Thursday 20 June 2019

Ford to slash 7,000 jobs amid industry upheaval

Cuts: Ford CEO Jim Hackett said the company must reduce bureaucracy, and empower managers. Photo: AP
Cuts: Ford CEO Jim Hackett said the company must reduce bureaucracy, and empower managers. Photo: AP

Keith Naughton

Ford plans to eliminate about 7,000 salaried jobs - about 10pc of its global white-collar workforce - as pressures mount on carmakers to keep pace with massive technological shifts amid signs global demand has peaked.

Eliminating the positions will save Ford about $600m a year, CEO Jim Hackett wrote in a memo to employees yesterday. The majority of the cuts will be completed by May 24 in North America, and by the end of August in other markets including Europe, China and South America. Ford employs 31 at its Cork HQ, the majority in sales and marketing. It is unclear if these jobs will be affected by the cuts.

Please log in or register with Independent.ie for free access to this article.

Log In

"To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision-making, focus on the most valuable work, and cut costs," Mr Hackett wrote. "Ford is a family company and saying goodbye to colleagues is difficult and emotional."

Ford shares briefly moved higher before the start of regular trading but were down 0.3pc to $10.26 as of 10.15 am Monday in New York trading. The stock has climbed 34pc this year after plunging in 2018. The dismissals are designed to shrink Ford's management structure by 20pc and streamline the number of organisational layers to nine or less, from 14, Hackett said. The cuts are far less than the 25,000 predicted by a Morgan Stanley analyst last year.

In the US, there will be 800 "involuntary separations" including 500 this week, according to a Ford spokesman. As of April 25, Ford had 196,000 employees worldwide, down from 202,000 at the end of 2017. The memo provides additional details of a company-wide salaried job reduction that Ford notified employees of in October, and is part of a broader $11bn restructuring.

Other changes focus on product development, such as the creation of a new vehicle architecture and design team and greater investments in infotainment, software development and electrification.

The cuts come as many global carmakers are struggling to cope with consumers' preference for crossovers and SUVs over sedans, slumping sales and the cost of electrifying their lineups to meet stiffer emissions restrictions in markets including China and Europe.

General Motors, Volkswagen and Tata's Jaguar Land Rover also are eliminating thousands of employees as the rise of electrification and self-driving technology reshapes the industry.

Bloomberg

Irish Independent

Also in Business