Ford to lay off 7,000 white collar workers

Ann Santiago
May 20, 2019

By the time it ends in August, 7,000 white-collar jobs will have gone.

Ford said the plan, which includes 2,300 cuts in the U.S., will save the company $600m (£471m) a year.

Ford announced Monday that they would be laying off about 500 white collar employees in the USA, mostly in Dearborn, with more cuts globally.

Throughout the summer, 300 more job cuts will take place in the US, for a total of 800 in the redesign process. About 1,500 have left voluntarily or with buyouts, while another 300 have already been laid off.

Eliminating the positions will save Ford about $600m a year, CEO Jim Hackett wrote in a memo to employees Monday, seven months after the company informed employees of a salaried workforce "redesign".

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.

Hackett said it would give those affected by the job cuts a few days to wrap up and say goodbye, emphasising Ford's position as a family company.

It's the second set of layoffs for Detroit-area automakers, even though the companies are making healthy profits.

U.S. President Donald Trump has pushed boosting auto sector employment, harshly criticizing automakers, especially General Motors Co for cutting jobs, but has focused primarily on blue-collar cuts at factories rather than white-collar reductions.

In the US about 1,500 white-collar employees left the company voluntarily since the restructuring began a year ago, some taking buyouts. Many have been upset that it took so long for the company to make decisions. Most of the cuts are expected to impact workers at its headquarters in Dearborn, Michigan. About 6,000 blue-collar positions were cut, but most of laid-off factory workers in the USA will be placed at other plants mainly that build trucks and SUVs.

Both companies have said the cuts are needed because the companies face huge capital expenditures to update their current vehicles and develop them for the future. Morgan Stanley analyst Adam Jonas predicted 25,000 white-collar job cuts late a year ago, a number that Ford would not deny. That stood in contrast to how GM handled layoffs earlier this year where employees were asked to leave immediately.

The dismissals are created to shrink Ford's management structure by 20% and streamline the number of organisational layers to nine or less, from 14, Hackett said.

Ford acknowledged in the company email that saying goodbye to colleagues is hard and emotional.

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