Ford continues to make cuts and their latest round of cost savings will hit its white-collar workforce pretty hard.
According to CNBC, Ford is cutting approximately ten percent of its white-collar workforce and this equates to roughly 7,000 jobs. Most of the cuts will be made overseas, but around 2,300 people in the United States will lose their job. However, it’s not as bad as the numbers suggest as a spokesperson told the publication that 1,500 of those 2,300 cuts were achieved from voluntary buyouts last year.
Management will be particularly hard hit as Ford CEO Jim Hackett sent an e-mail (PDF) saying the automaker will reduce its “management structure by close to 20%.” Those are significant cuts, but Hackett said they’re important to reduce bureaucracy and speed up decision making.
Unfortunately, employees aren’t getting much of a warning as nearly 900 jobs will be eliminated this week. Of that, approximately 500 are in the United States. An additional 300 jobs will be eliminated in America by the end of August.
While Ford used to require fired employees “leave immediately with their belongings,” the company now says separated workers will have the option of sticking around for a few days to wrap up projects and say goodbye to colleagues. The automaker also said they have a “range of resources and services” to help support people who are losing their job.
The cuts are expected to save Ford approximately $600 (£471 / €537) million annually and Hackett said this is important for Ford’s success as the company needs to “reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work and cut costs.”
The cuts are part of Ford’s so-called “Smart Redesign” which aims to put the company in a position to “win in a fast-changing future.” Cutting costs and bureaucracy were a big part of the plan and Hackett said by the end of the year most of the company will have nine or less organizational layers – a drastic decline from the 14 layers that existed when the program began.