Ford Motor Company (NYSE: F) is laying off 7,000 white-collar workers as part of a restructuring plan designed to save USD 600 Million a year. Upper-level management structure will be reduced by nearly 20% in an effort to reduce bureaucracy.
“As we have said, Ford is undergoing an organizational redesign process helping us create a more dynamic, agile and empowered workforce, while becoming more fit as a business,” Ford said in a statement. Hourly factory workers are safe from this round of layoffs. At the end of last year, the Company had about 199,000 total employees worldwide, according to its annual filing.
About 900 of the 7,000 job cuts are expected to happen this week, 500 of which will be in the U.S. The remaining 300 U.S. terminations will be complete by the end of August. This includes both voluntary buyouts and involuntary layoffs.
Ford’s terminations mimic those of General Motors (NYSE: GM) in November. GM eliminated around 8,000 non-union jobs, or 15% of its salaried and contract workers. It also closed five North American factories as part of that announcement. Over the past year, several top car makers have reported job cuts totaling nearly 30,000 positions worldwide.
Since assuming the position of Ford President and CEO two years ago, Jim Hackett has placed a focus on cutting costs as the automaker seeks to improve profitability and reclaim market share. Hackett aims to slash USD 14 Billion by 2020.
Shares of Ford are down 9% over the past 12 months.