Ford will cut 10 percent of its salaried employees
Ford will cut 7,000 jobs from its global salaried workforce, or about 10 percent of its 70,000 employees, the company announced on Monday. About 20 percent will be senior-level managers, which is part of an effort to flatten the company’s organizational structure.
Eight hundred of the job cuts will happen in North America, with 500 of them coming on Tuesday. The cuts will be complete by August, Ford said. Some contract workers will also lose their jobs, though the company didn’t specify how many. Ford also didn’t say what divisions might see the most losses, though a bulk of the 7,000 eliminated jobs are likely to come from the company’s decision to close a plant and leave the South American commercial truck market. Including non-salaried workers, Ford has a global workforce of just over 200,000.
The company announced an $11 billion restructuring last July, but it has been slow with details
The cuts are part of an $11 billion restructuring that was announced last July by Jim Hackett, Ford’s CEO. Hackett was brought over from Ford’s Smart Mobility division in 2017 to replace Mark Fields, who was CEO for three years.
The company tapped Hackett for his reputation as a leader at furniture company Steelcase, but also because he seemed more willing to embrace relationships with Silicon Valley, something all of the major automakers have been looking for as they face increasing competition from tech companies.
Hackett has helped oversee the launch of an entirely new spinoff company dedicated to autonomous vehicles, a $500 million investment in EV startup Rivian, and a number of software and cloud efforts meant to make the company’s cars more connected.
He also had to wrestle with the company’s lagging performance in the stock market, which is what drove the $11 billion restructuring. While it was announced last year, Hackett has been largely mum on what the shakeup would look like.
It’s only in the last few months that Ford has started to let out more details about how the company will change. A big piece is that Ford announced a “global alliance” with Volkswagen in January centered on pickup trucks and commercial vans, with an eye on autonomous and electric vehicles as well.
But now we finally know how many of the company’s employees Ford is willing to let go in order to scale down its operating costs as it takes on all of these new efforts.