Ford Will Fire 7000 Salaried Employees Worldwide To Cut Costs; Aim To Save $600 Million
With the motive of massive organizational restructuring, with an intent to flatten the organizational structure, Ford will be cutting down 7000 white-collar jobs from its global salaried workforce. It is about 10% of it’s salaried staff worldwide which is a part of the plan to cut down cost.
These changes were done to better prepare Ford to thrive in the future, as said by the company.With this, it’s planning to save about $600 million per year by eliminating bureaucracy and by increasing the number of workers reporting to each manager.
The company has committed last year to spend $11 billion on reshaping the organisation.Few details have been shared by Ford on how it plans to spend such huge amount-
- It is planning to close 3 plants in Russia
- One factory in Europe and Brazil each
- 800 of the job cuts will happen in North America
- Some contractual workers will also lose their job but the numbers haven’t been released yet.
- The company is planning to cut 5000 jobs in Germany through “Voluntary Separation Program”
- Ford even has plans to cut off a number of jobs in the United Kingdom, but no specific details have yet been released.
Struggles Faced By Ford
Just like all the other automakers, Ford is also facing the increasing pressure of the everything being automated in the future.They have to buy into new technology to be prepared for a world full of self- driving cars and customers who would rather buy ride than auto themselves.
It also faces competition from major tech companies such as Tesla (TSLA) and Alphabet’s (GOOGL) Waymo who are also interested in the market.
Ford is facing a drop of 14% as it sold 2,37,000 fewer cars and trucks in the first quarter. Along with that it does not sell battery-only electric vehicles like it competitors, because it stopped the production of electric Focus when it discontinued the production of gas version of that vehicle.
Jim Hackett, Ford’s CEO, also had to struggle with the battle of lifting the company’s performance in the stock market which was the major reason behind the $11 billion restructuring.
To improve its performance it has been seeking out new alliances. Ford had recently collaborated with Volkwagen to develop new products such as pickup trucks and commercial vans, keeping an eye on autonomous and electric cars as well .
They have recently announced $500 million investment in Rivian, which will launch an electric truck next year.