Ford to cut 7,000 white collar jobs in global restructuring

Ford Edge rolling off the production line at the Oakville Assembly plant.
PHOTO: FORD

DETROIT — Ford is cutting about 7,000 white-collar jobs, which would make up 10% of its global workforce.

The company has said it was undertaking a major restructuring, and will have trimmed thousands of jobs by August. The company said in a statement it does not have details of the impact on its Canadian workforce, but added all restructuring actions in North America will be wrapped up by June.

The company said that the plan will save about US$600 million per year by eliminating bureaucracy and increasing the number of workers reporting to each manager.

In the US about 2,300 jobs will be cut through buyouts and layoffs. About 1,500 already have happened. About 500 workers will be let go this week.

In a memo to employees, May 20, CEO Jim Hackett said the fourth wave of the restructuring will start on May 21, with the majority of cuts being finished by May 24.

“To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts,” Hackett’s wrote.

In the US about 1,500 white-collar employees left the company voluntarily since the restructuring began last year, some taking buyouts. About 300 have been laid off already, with another 500 layoffs starting this week.

Most of Ford’s white-collar workers are in and around the company’s Dearborn, Michigan, headquarters.

It’s the second set of layoffs for Detroit-area automakers, even though the companies are making healthy profits. Sales in the US, where the automakers get most of their revenue, have fallen slightly but still are strong.

In November, General Motors announced it would shed up to 14,000 workers as it cut expenses to prepare for a shift to electric and autonomous vehicles. The layoffs included closure of five factories in the US and Canada and cuts of another 8,000 white-collar workers worldwide. About 5,000 blue-collar positions were cut, but most of laid-off factory workers in the US will be placed at other plants mainly that build trucks and SUVs.

Both companies have said the cuts are needed to prepare for the future, because the companies face huge capital expenditures to update their current vehicles and develop them for the future.

The cuts brought withering criticism of GM from President Donald Trump and Congress, especially the closing of a small-car factory in Lordstown, Ohio. Trump campaigned on bringing factory jobs back to the industrial Midwest. GM has since announced a possible deal to sell the Lordstown plant to a startup electric vehicle maker, but it hasn’t been finalized.

Hackett said in the memo that Ford is departing from past practices and letting laid-off employees stay a few days to wrap up their jobs and say good-bye to colleagues. In the past, laid-off workers would have had to pack up and leave immediately.

“Ford is a family company and saying goodbye to colleagues is difficult and emotional,” Hackett wrote.