Ford Motor to slash its North American salaried workforce by 1,000 jobs
- Ford Motor to slash its North American salaried workforce by 1,000 jobs.
- The automaker will offer voluntary buyouts to its U.S. employees.
- The U.S. carmaker's layoff is not attributed to COVID-19-related costs.
Anonymous sources said on Tuesday that Ford Motor Co. (NYSE: F) plans on slashing its North American salaried workforce by 1,000 jobs on Tuesday in the next phase of its restructuring program valued at £8.17 billion. The cost-cutting that was announced two years ago primarily targets its home market.
Ford opened about 1% down on Tuesday but recovered the entire loss on market open. It is now trading at £5.08 per share versus £2.98 per share in March when the impact of COVID-19 was at its peak. Wishing if you could invest in the stock market online? Here’s a simple way to buy shares online in 2020.
The layoff is not attributed to COVID-19-related costs
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As per the sources, the layoff is aimed at improving efficiency and is not attributed to COVID-19-related costs. An official announcement is expected later this week. Ford’s German peer, BMW, also expressed plans of cutting its U.S. workforce.
Nonetheless, Ford Motor, much like its global competitors, has seen a massive hit in recent months due to the Coronavirus pandemic that has so far infected more than 25 million people worldwide and caused over 0.85 million deaths. The company forecasts to conclude this year with an operating loss that will mark its first in almost a decade. In the fiscal second quarter, Ford reported £1.41 billion of adjusted pre-tax loss.
In 2019, Ford decided in favour of minimising its footprint in Europe. The carmaker closed production facilities in the continent that resulted in thousands of workers losing their jobs. Ford’s overall performance is the strongest in North America, which is why the layoff is relatively narrower in this region.
Ford to offer voluntary buyouts to its U.S. employees
As per the automaker, it will offer voluntary buyouts to its employees in the U.S. that are to be laid off. Previously, it had slashed its U.S. salaried workforce by 2,300 workers. Ford said in May it was partnering with Volkswagen on self-driving and electric vehicles.
During the first round of restructuring, the Dearborn-based company cut 7,000 jobs globally in 2019; a move that as per Ford, was likely to result in £445 million of annual savings. As of the end of last year, the automaker’s workforce comprised of 190 thousand people worldwide.
A spokesman for Ford Motor refused to comment any further on imminent job cuts at this stage. At the time of writing, Ford is valued at £19.87 billion.