Ford is looking to cut costs and it's reportedly planning to cut 10 percent of its global workforce to make it happen.
The layoffs are apparently part of a bid to save $3 billion in costs, at a time when car sales are sluggish and new technologies require heftier investments.
"Ford Motor Co. aims to cut about 10% of its global workforce amid Chief Executive Officer Mark Fields's drive to boost profits and the auto maker's sliding stock price, according to people briefed on the plan," reports the Wall Street Journal.
According to the publication, Ford could announce the layoffs as soon as this week and the job cuts will likely target mainly salaried workers.
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.
Ford Strategic Priorities
Ford says that it has three priorities in its strategy, aiming to drive profitability and value. These priorities include focusing on bolstering the most profitable elements of its core business, investing prudently, yet aggressively in emerging opportunities, and revamping underperforming areas of its core business.
"Reducing costs and becoming as lean and efficient as possible also remain part of that work," says the company. "We have not announced any new people efficiency actions, nor do we comment on speculation."
Reuters also learned from a source familiar with the plans that Ford intends to offer attractive incentives for early retirement so that it can cut the number of salaried employees by Oct. 1. However, the company reportedly doesn't plan to reduce its production or hourly workforce.
Donald Trump And Auto Industry Jobs
As Reuters further points out, Ford's strategic plans to reduce its workforce by 10 percent may not sit well with U.S. President Donald Trump, who wants to boost employment in the auto industry.
Nevertheless, Ford's stock price has dipped and its profits have been sluggish, putting more pressure on Fields to turn things around. The automaker is taking other steps as well, such as making new investments in various initiatives, including $4.5 billion for electric vehicles. Ford also plans to have self-driving cars on the streets by 2021.
The company has roughly 200,000 salaried employees worldwide, about half of which are in North America. Trump heavily criticized the auto industry during his presidential campaign, noting that automakers are too reliant on Mexican plants to make vehicles for the U.S. market.
Since becoming the president of the United States, Trump has pledged to make it a top priority to boost employment in sectors such as the auto industry, albeit he didn't outline many concrete plans to achieve it.
Back in January, following criticism and pressure from Trump, Ford pledged to scrap plans for a Mexican car plant and added 700 jobs in Michigan instead. With this in mind, it will be interesting to see how things unfold if Ford does indeed plan to cut 10 percent of its global workforce, as the layoffs will likely affect U.S. jobs as well.
Until an official announcement from Ford, however, take this report with a grain of salt.
