Business

Ford enters final stretch of cutting 7,000 white-collar jobs

Ford is almost finished with a major global restructuring, and by the time it ends in August, the automaker will have shed 7,000 white-collar jobs.

Cuts are part of a global restructuring set to be completed in August

Ford said Monday it will cut 7,000 white-collar jobs to save about $600 million US per year. (avid Zalubowski/The Associated Press)

Ford is almost done cutting about 7,000 white-collar jobs, which would make up 10 per cent of its global workforce.

The company has said it's undertaking a major restructuring, and on Monday said that it will have trimmed thousands of jobs by August.

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

In the U.S., about 2,300 jobs will be cut through buyouts and layoffs. About 1,500 already have happened, and some 500 workers will be let go in the U.S. and Canada this week. A final 300 will be cut in the U.S. and Canada by August, a spokesperson for Ford Canada told the CBC in an email Monday.

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

To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy…and cut costs.- Jim Hackett, Ford CEO

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

In the U.S., about 1,500 white-collar employees have 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, Mich., headquarters.

2nd recent set of layoffs

It's the second set of layoffs for Detroit-area automakers, even though the companies are making healthy profits. Sales in the U.S., 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 U.S. 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 U.S. 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 companies face huge capital expenditures to update their current vehicles and develop them for the future.

The cuts brought withering criticism of GM from U.S. 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.

Shares of Ford Motor Co. slipped early Monday.