Ford is eliminating 10% of its salaried workforce this year.
We all knew this was coming. Ford has been on the warpath all year seeking greater efficiencies from their global operations, and sometimes that means cutting not just blue-collar assembly workers but also white-collar managers. Ford announced recently that it will slash 7,000 salaried positions from its global workforce. That represents 10% of non-hourly positions at Ford.
According to a new report from Reuters, Ford CEO Jim Hackett sent an email to employees earlier today that informed them of the layoffs.
"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 said, adding that cuts will include both voluntary buyouts for employees approaching retirement age as well as non-voluntary layoffs. All layoffs are expected to be completed by the end of August.
Most of the cuts would happen to Ford’s upper management with up to 20% of upper-level managers set to lose their jobs. This will result in a flatter hierarchy structure in Ford that should reduce the overall bureaucracy and management costs.
Ford began the year with 14 organizational levels and is expected to wind up with 9 once the layoffs are completed. Roughly 2,300 of those positions will be in the USA.
The layoffs are all part of Ford’s larger brand restructuring efforts that will, among other things, see the elimination of cars from the North American lineup. This is done to reduce costs as the company plans to save billions in operational expenses.
The layoffs also come at a time when the automotive industry seems to be shrinking in America. GM recently announced the closure of several plants within the US and Canada, and while Ford has so far avoided closing any of their facilities, they have announced significant movement within their workforce as jobs are shifted to making vehicle models that are selling well.