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Job cuts at Ford to reach 7,000 by the end of August
FORD Motor said on Monday that it was near the finish line in its two-year effort to pare its workforce.
The company said it would lay off 500 employees in the United States this week and an unspecified number over the next several weeks as part of a broader plan to shrink its salaried ranks by 7,000 people, or 10 per cent, with the sharpest cuts at higher ranks. Including jobs cut earlier this year, a total of 800 jobs in the US will be cut by August, the company said.
"Consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20 per cent," Ford's chief executive, Jim Hackett, said in an e-mail to employees. "This will result in annual savings of about US$600 million."
The reductions in the US include 1,500 jobs eliminated last year through buyouts. The other cuts have been overseas, where the final phase of the restructuring should be completed by the end of August.
Mr Hackett has been cutting costs in a push to increase profits in the face of slowing sales, especially in Europe, South America and Asia. Ford reported last month that it earned US$1.1 billion in the first quarter, about 34 per cent less than in the same period a year earlier.
Other carmakers have also struggled. Ford's main rival, General Motors, has idled or greatly scaled back operations at four plants in the US and one in Canada. GM aims to trim 14,000 blue- and white-collar jobs. NYTIMES