Ford eliminates 7K jobs worldwide to save $600 mn annually
Washington — The Ford Group on Monday announced the elimination in the coming months of 7,000 jobs, 10 percent of its worldwide workforce, of which 2,300 will be in the United States, a move designed to save $600 million per year.
The announcement was made by Ford CEO Jim Hackett in a letter sent by e-mail to employees in which he justified 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. This required intensive work across multiple layers of our company,” wrote Hackett.
The US workers affected by the cuts on Tuesday will begin receiving notice of their dismissals and that process will be completed by May 24.
The restructuring will continue “in Europe, China, South America and elsewhere with hopes of completing the reorganization by the end of August,” Hackett added.
He said that by eliminating the jobs, “consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20%,” thus saving approximately $600 million per year in payroll costs.
Hackett said that the laid off workers will have several days to say goodbye to their workmates instead of being required to leave their jobs immediately.
“Ford is a family company and saying goodbye to colleagues is difficult and emotional. We have moved away from past practices in some regions where team members who were separated had to leave immediately with their belongings, instead giving people the choice to stay for a few days to wrap up and say goodbye,” he said in the e-mail.
“We also have a range of resources and services in place to support employees in managing this transition. I hope that you take a moment to thank them personally for their service and commitment to Ford,” he added.
He said the 7,000 jobs will eliminated on both a voluntary and forced basis.
Hackett unexpectedly took over leadership of Ford in May 2017, replacing Mark Fields mainly to improve the company’s stock price.
After just three years as Ford CEO, Fields was fired after being criticized by stockholders and board members for the decline in the company’s stock price.
Bill Ford, the president of the firm’s administrative board and great-grandson of the company’s founder, at the time justified Fields’ firing by saying the firm needed a clearer vision for the future to be able to make very quick decisions.
Despite Hackett’s efforts, the value of Ford’s stock has continued to decline and on Monday, after the announcement of the layoffs, it is down about 0.15 percent at $10.28, whereas five years ago shares were trading at above $16.
