Ford Motors, on Monday, said that it would be laying off about 7000 managers and other salaried employees globally. The number accounts to roughly 10% of its white-collared job workforce around the world. The decision taken is supposedly part of a restructuring plan which is designed to save the giant automaker $600 million annually.
The cuts which were decided on by the company was informed to the employees by the CEO Jim Hackett via emails, which also stated that the layoffs would be implemented until August. Most of the reductions are outside the borders of the US, with roughly 2300 jobs cuts coming from The States. As reported by a spokesman, 1500 jobs cuts in the US were last year’s voluntary buyouts.
The layoff does not target Ford’s hourly factory workers. With a workforce of 199,000 employees across the globe, the number is 3000 less than that of the previous year as has been witnessed in a securities filing.
As termed as Hackett, the move of cutting 20% of the upper-level manager jobs is to reduce bureaucracy.
Voluntary buyoffs and involuntary layoffs compile overall layoff list. 900 jobs cuts are expected to happen this week, 500 of which will be America. By August end the organisation will see the completion of the rest of the pending layoffs in the US. The automaker claims that its restructuring programme in North America is on the final stages and the organisational redesign would be extended further in Europe, China, South America and other international business markets until the end of August.
Addressed in a letter, Hackett stated that to succeed in this competitive automobile industry and make Ford the number one company; there is a need to reduce bureaucracy, empower managers and cut costs.
The basic objective of Ford is to take out its layers of management and cut down the ’14 layer’ of management to a much simpler and easier management system consisting of ‘9 layers’.
One potential corrugation in the plan is the problem of the imposition of new tariffs on the imported vehicles and car parts. Ford being a heavy importer of car parts in the US would have to bear a huge cost levied by the tariffs, which could be a concerning factor when the sales are down.
Ford, on the other hand, has partnered with Volkswagen for a joint venture of pickup trucks and commercial vans. Both the companies had a coalition which aims at the development and research of electric and self-driven vehicles.
A previous statement by the company stated that it planned to cut its workforce in the European countries as it was being pressurised to reconstruct the company’s European operations. One of the company’s spokesman, on Monday, stated that there was a possible overlap between the job cuts announced that day and the various restructuring decisions made by the company in the past. The exact number of overlapping job cuts was not specified by the spokesman.
