Ford will cut 10 percent of its salaried jobs in North America and Asia Pacific this year in an effort to boost profits.
Ford will cut 10 percent of its salaried jobs in North America and Asia Pacific this year in an effort to boost profits. The company will offer voluntary early retirement and separation packages to its workers. It expects 1,400 positions to be affected by the end of September. Ford believes it will meet its targets by voluntary means and doesn’t expect involuntary layoffs, spokesman Mike Moran said Wednesday.
”We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities,” Ford said in an email sent to employees early Wednesday. ”Reducing costs and becoming as lean and efficient as possible also remain part of that work.”
You may also like to watch:
Certain areas of the business won’t be targeted, including its product development and credit divisions. Salaried and hourly workers in Ford’s plants won’t be affected. Information technology and analytics workers also won’t be affected.
The offer will be open to about 15,300 workers, including 9,600 in the U.S., 1,000 in Mexico, 600 in Canada and 4,141 in Asia.
The company says it will release more details to employees in June.
Ford’s stock price has fallen nearly 40 percent over the last three years as investors worry that sales in the U.S., its biggest market, are peaking. Ford is also spending heavily on technology with an uncertain future, like self-driving vehicles. Earlier this year, it announced an investment of $1 billion over five years in Argo AI, an artificial intelligence startup.
Net income fell 35 percent to $1.6 billion in the first quarter. It expects to earn a pretax profit of $9 billion this year, down from a record of $10.4 billion in 2016.
Shares of Ford Motor Co. fell 4 cents to $10.90 in premarket trading after the company announced the reductions.