Economy

Ford layoffs beginning today, leading to 7,000 cuts globally

Ford layoffs beginning today, leading to 7,000 cuts globally

Ford is cutting 7,000 white-collar jobs, or about 10% of its global salaried workforce, as it nears the end of a major company restructuring by the end of August. Hackett told employees that managers would have more direct reports to cut down bureaucracy.

It has been a theme for USA corporations soaking in profits, low taxes, and a raging bull market over the past year: cut, cut, and cut some more. About 1,500 have left voluntarily or with buyouts, while another 300 have already been laid off.

This comes on the heels of Ford's recent announcement that it would change its investment in its home state a bit to the tune of $900 million and 900 new jobs.

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

This news also comes after Detroit-based automaker General Motors cut some 4,000 white-collar workers after announcing a series of plant closures and manufacturing layoffs.

A spokesperson tells 7 Action News that about 1,500 people took buyouts a year ago, which will bring the total eliminations in the United States to around 2,300. "We have moved away from past practices in some regions where team members who were separate had to leave immediately with their belongings, instead giving people the choice to stay a few days to wrap up and say goodbye".

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According to a statement sent to Fast Company, this organizational shift is mostly finished in the U.S. Now, the downsizing will expand to the rest of the world.

Ford's massive restructuring, expected to cost about $11 billion, is created to cut costs dramatically. About 6,000 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. But Hackett has to show Wall Street that it can make more money, which means these job cuts are only the beginning.

General Motors has also undertaken job cuts over the previous year for similar reasons. "We will continue to work collaboratively and respectfully without teams and other partners to ensure our designs are effective and fit and that our employees are treated fairly and with respect".

He acknowledged saying goodbye to colleagues is "difficult and emotional".