Ford to cut workforce by 10 percent
- Author: Zachary Reyes May 24, 2017,
May 24, 2017, 21:30
The cuts are the biggest to Ford's US white collar staff since 2007, when 7,200 workers took voluntary buyout packages. The company does not however, intend to cut its hourly workforce or its production.
Shares in Ford Motor Company (NYSE:F) edged higher in pre-market trading on Tuesday as reports suggested that the USA carmaker is planning to cut 10% of its global workforce. But it wasn't an outright denial either - "Reducing costs and becoming as lean and efficient as possible also remain part of that work", said the company.
Ford Motor Co. plans to trim about 10 percent of its global salaried workforce while retaining the tech talent it's recruited to develop driverless and electric cars, according to a person familiar with the strategy. 1,400 salaried positions will be affected, and cuts will be complete by the end of September.
Forbes notes that a spokesman for the automaker could not confirm the news, but Ford issued a statement hinting that the upcoming layoffs are indeed real, just not public knowledge just yet.
But investors are anxious about slowing sales and an industry that could be dominated by autonomous vehicles and auto sharing in the future.
Deep cuts in the US could trigger political backlash due to the role the auto industry played during the campaign and early tenure of President Donald Trump.
In January, Ford also added 700 MI jobs, following criticism from Trump over plans to increase production in Mexico.
Ford's profits sank 35% during the first quarter to $1.6 billion as higher costs for warranties, recalls and materials eroded profits. Automakers are trimming expenditures as they brace for slowing auto sales. In fact, 2016 was the second most profitable year ever for the company.
Ford's market capitalization has been surpassed by Tesla Inc (TSLA.O), which has sold just a fraction of Ford vehicles.
The Ford Motor Co. logo is seen on the front of a new 2012 Ford Focus.
Last week, during the company's annual meeting, a number of shareholders pressed Ford's management about the company's stock price, which has dropped 17% since January to $10.94 per share.