DETROIT (AP) — Ford revealed details of its long-awaited restructuring plan Monday as it prepared for a future of electric and autonomous vehicles by parting ways with 7,000 white-collar workers worldwide, about 10% of its global salaried workforce.
The major revamp, which had been underway since last year, will save about $600 million 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 have left voluntarily or with buyouts, while 300 others have already been laid off. About 500 workers will be let go starting this week, largely in and around the company’s headquarters in Dearborn, Michigan, just outside Detroit.
The layoffs are coming across a broad swath of the company, including engineering, product development, marketing, information technology, logistics, finance and other areas. But Ford also said it is hiring in critical areas, including those developing software and dealing with self-driving and electric vehicles.
In a memo to employees Monday, CEO Jim Hackett said the fourth wave of the restructuring will start Tuesday, with the majority of U.S. cuts being finished by Friday.
“To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts,” Hackett wrote.
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 that 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 the closure of five factories in the U.S. and Canada and cuts of another 8,000 white-collar workers worldwide. About 6,000 blue-collar jobs were cut, but most of the laid-off factory workers in the U.S. will be placed at plants that mainly build trucks and SUVs.
Both companies have said the cuts are needed because they face huge capital expenditures to update their current vehicles and develop them for the future.
At GM, the cuts brought withering criticism from 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.
Factory workers have not been affected by Ford's restructuring so far, as the company has retooled car plants so they can build more popular trucks and SUVs.
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 goodbye 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.