Ford has announced it is cutting 7,000 white collar jobs worldwide. The news is not a welcome one, but nor is it really much of a surprise. The company is in the midst of a massive restructuring plan that aims to ensure its long-term survival.
Still, the number is large, representing around 10% of the automaker’s global white-collar workforce. The decision is in line with the company’s drive to transition to new technologies, most notably electric and self-driving vehicles.
According to Ford, the job cuts will allow it to save $600 million USD per year. This figure was advanced as part of a memo sent by Ford CEO Jim Hackett to the company’s employees this past Monday.
“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.”
- Jim Hackett, CEO, Ford
800 of the job losses will be in the United States; 500 of them take effect immediately, while another 300 positions will be eliminated in the very near-future. In all, some 2,300 positions are being abolished by Ford in the U.S., 1,500 workers having already accepted voluntary buyouts.
The majority of the job cuts are taking place at the company’s HQ in Dearborn, Michigan. The positions being eliminated are mainly in the marketing, engineering, product-development, logistics and finance departments.
To get a sense of the magnitude of Ford’s restructuring plan, it’s important to understand that the company’s goal is to find $25.5 billion in cost reductions. Meanwhile the automaker is making big investments in the development of new technologies.
Change is afoot at Ford, in a big way. Only time will tell if the decisions being made will have been the right ones.
Even if you acknowledge the necessity of the moves being made by Ford, job cuts like this one are never easy to swallow. In the past six months, we’ve seen Tesla slash 3,000 jobs, Jaguar-Land Rover cut loose 4,500 workers and General Motors eliminate 14,000 jobs.