Ford Motor Co. plans to eliminate about 7,000 salaried jobs -- about 10% of its global white-collar workforce -- as pressures mount on the auto industry to keep up with technological shifts amid a global sales slowdown.
Eliminating the positions will save Ford about $600 million a year, Chief Executive Officer Jim Hackett wrote in a memo to employees Monday. The majority of the cuts will be completed by May 24 in North America, and by the end of August in regions including Europe, China and South America.
“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,” Hackett wrote. “Ford is a family company and saying goodbye to colleagues is difficult and emotional.”
The changes are designed to shrink Ford’s management structure by 20% and include streamlining the number of organizational layers to nine or less, from 14, Hackett said. 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 memo fleshes out the details of a company-wide salaried job reduction that Ford notified employees of in October, and is part of a broader $11 billion restructuring. General Motors Co. and Volkswagen AG also are eliminating thousands of employees as the rise of electrification and self-driving vehicle technology reshapes the global auto industry.
Ford shares reversed declines before the start of regular trading, rising as much as 1.1% to $10.40.
By Keith Naughton