Ford CEO Jim Hackett cleared up reports for months that the company would have a major white-collar job reduction.
Ford
Ford Motor Co., as expected, is trimming its sails in the hopes of jump-starting its profitability and share price, announcing a cut of 7,000 white-collar jobs worldwide, including about 2,300 in the U.S.
CEO Jim Hackett has been talking about the cuts since last Fall, calling the restructuring a right-sizing and reallocation of human resources. Indeed, though 7,000 are being cut, Ford is continuing to hire in other areas of the company.
“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 in an email to employees.
The cuts are not affecting hourly workers at plants. Since 2009 when the auto industry and global economy was hammered, Ford began cutting its manufacturing footprint and finds itself operating very efficiently today at the plant level.
In an interview last Fall when Ford first announced and began talking about the need to slim down, Hackett said: “We have parts of the company that have too many of the wrong skills, too many layers of management. A big part of what we are doing is getting input from departments and divisions about where we need to be trimmer and more agile.”
Ford is reducing 14 organizational layers to nine by year-end. Among the changes driving the restructuring is Ford’s new alliance with the Volkswagen Group, which enables it to cut workforce in Europe, the company’s elimination of sedans in the U.S., its investments in autonomous-driving and smart-city investments and work.
As part of the restructuring, for example, Hackett said the product development team created a new vehicle architecture and testing team, a new systems engineering and design assurance group, and expanded future investments for in-vehicle infotainment, software, electrification and other areas.
Of the 2300 U.S. jobs lost, 1500, said Ford, were voluntary retirements and departures.
The Associated Press reported that Ford will give those affected by the job cuts a few days to wrap up and say goodbye to co-workers. That is in contrast to how GM handled layoffs earlier this year, reported AP, where employees were asked to leave immediately.
Ford shares have been rising the last three months, rising from about 8.00 per share in February to $10.30 in mid-day trading.