As part of workforce restructuring effort, the U.S. automaker Ford Motor Co. is expecting unspecified job cuts amidst the company’s struggles to cope with competitive pressures in global market. The management has told its 70,000 salaried employees about the massive layouts in $11 billion restructuring.
About 20,000 jobs out of 202,000 from Ford’s global workforce are speculated to be cut, but the automaker wouldn’t quantify how large it expected the salaried reduction to be or it if would involve involuntary separations. Ford also couldn’t estimate the financial impact or say whether it will take any charges for the program, Bloomberg reports.
In an interview on Friday (Oct 5), Ford’s company spokeswoman said that the company has announced to its employees that they were in the early stages of an organisational redesign of the global salaried workforce.
“Yesterday, we told our employees that we were in the early stages of an organizational redesign of the global salaried workforce. The goal is “that gradually you’re getting a wider, flatter organization that is really designed for speed. Inevitably, we expect that to result in some reductions, but at this point there’s not a target.”
Earlier this year, the U.S. automaker cut its profit forecast for 2018 after second-quarter earnings fell by more than half in July. Chief Executive Officer Jim Hackett announced the restructuring at that time but declined to give details beyond the $11 billion cost. For now, the company is seeking to cut more than $25 billion in costs and has now revealed that some of that will come by shrinking its salaried workforce.
Hampton added that Ford needs to wait until the middle of next year to determine how many salaried workers it will eliminate. Regions that are struggling the most may see the deepest cuts. Ford is struggling in Europe, Asia and South America, with only its operations in North America turning a profit, thanks primarily to its F-Series pickup line.
“There are areas of our business that need to become more fit and certainly this process will also help them do that,” Hampton said. “So you would anticipate those areas of the company to maybe see more reductions than others.”