Ford Motor will cut roughly 10 percent of its global salaried staff by August as part of a companywide “redesign,” the company told employees Monday.
The move will eliminate 7,000 white-collar jobs and save the U.S. auto giant about $600 million a year.
The cuts represent the latest phase of Ford’s global restructuring, meant to make the company more agile and less bureaucratic in the face of industry tumult that has forced carmakers to pivot away from sedans and shutter plants nationwide.
Ford is working to cut $25.5 billion in operating costs over the next few years, the Detroit News reported. That’s coupled with the $11 billion redesign, which includes the salaried workforce cutbacks.
“We understand this is a challenging time for our team, but these steps are necessary to position Ford for success today and yet preparing to thrive in the future,” the company said in a statement.
The 7,000 job cuts — most of which already have taken place — include salaried employees who took buyouts within the past year, as well as positions that were never filled and later eliminated.
About 20 percent of the positions were senior-level management roles.
Ford also is seeking to restructure its ranks globally, including in Europe, China and South America.
ARTICLE CONTINUES BELOW ADVERTISEMENT
In North America, about 500 workers will lose their jobs this week but the total will climb to 800 by the end of June, the company said. Some contract employees in the United States also will be let go.
The U.S. auto industry has run into some turbulence after years of steady growth. Sales fell 5 percent in 2017, according to CNN Business, after climbing more than two-thirds from 2010 to 2016.
Foreign carmakers are streamlining their operations, too, by opening more U.S. plants, thus cutting down on shipping costs and delivery times.
Consumer tastes also have changed. Americans have shifted away from sedans and smaller cars to SUVs and trucks, a trend line that prompted Ford to retool a plant making Ford Focus compacts to accommodate new Ranger pickups.
But even as automakers scramble to change course, it may not be enough.
General Motors has laid off roughly 4,500 workers since early 2017. In March, GM shut down production in Lordstown, Ohio, an area where manufacturing jobs have declined in recent years.
About a quarter of America’s metro areas have been similarly affected, many in the Rust Belt, according to data provided by the Federal Reserve Bank of New York.