Ford to cut 7,000 jobs worldwide in ‘redesign’

Ford Motor Co. will cut roughly 10% of its global salaried staff by August as part of a companywide “redesign,” the company told employees Monday. The move will eliminate 7,000 white-collar jobs and save about $600 million a year.

The cuts represent the latest phase of Ford’s global restructuring, meant to make the company more agile and less bureaucratic in the face of industry tumult that has forced carmakers to pivot away from sedans and shutter plants nationwide. Ford is working to cut $25.5 billion in operating costs over the next few years, the Detroit News reported. That’s coupled with the $11 billion redesign, which includes the salaried workforce cutbacks.

“We understand this is a challenging time for our team, but these steps are necessary to position Ford for success today and yet preparing to thrive in the future,” the company said in a statement.

The 7,000 job cuts — most of which have already taken place — include salaried employees who took buyouts within the past year, as well as positions that were never filled and later eliminated. About 20% of the positions were senior-level management roles. Ford is also looking to restructure its ranks globally, including in Europe, China and South America.

In North America, about 500 workers will lose their

jobs this week, but the total will climb to 800 by the end of June, the company said. Some contract employees in the U.S. also will be let go.

By some estimates, the cutbacks could have been much more severe; one Wall Street analyst had projected as many as 20,000 job losses worldwide, the Detroit News reported.

CEO Jim Hackett, who announced the cuts Monday in a note to employees, has been stressing the need to reduce bureaucracy to make Ford more “physically fit” in the long term, said David Whiston, an auto industry analyst at Morningstar Research.

“White collar or salaried job cuts are not surprising when you hear management talking that way,” Whiston said. “What can they do now to right the ship?”

The U.S. auto industry has run into some turbulence after years of steady growth. Sales fell 5% in 2017, according to CNN Business, after climbing more than two-thirds from 2010 to 2016. Foreign carmakers are streamlining their operations, too, by opening more U.S. plants, thus cutting shipping costs and delivery times. Consumer tastes also have changed: Americans have shifted away from sedans and smaller cars to SUVS and trucks, a trend that prompted Ford to retool a plant making Ford Focus compacts to accommodate new Ranger pickups.

“It’s possible that with fewer models to produce, you need less people, too,” Whiston said.

But even as automakers scramble to change course, it may not be enough. General Motors has laid off roughly 4,500 workers since early 2017.

Ford’s announcement had impact on its stock, which was hovering around $10.25, down 0.33%, in late afternoon trading before closing at $10.28.