Ford will reduce its salaried workforce in North America and Asia by 10 percent in order to boost its profits and revitalize its sliding stock prices, a source told Reuters. The reduction plan, which will reportedly take effect by October 1, includes generous early retirement offers for salaried workers, although the automaker won’t decrease its hourly workforce or production.
In the U.S., Ford has roughly 30,000 salaried workers and its move to cut them will likely go against President Donald Trump’s agenda to boost auto industry employment. However, the cuts were part of an initiative that aims to reduce the automaker’s costs by $3 billion, according to a person familiar with the matter who spoke with Reuters. The source said that the cuts are also due to the decline of U.S. auto sales after seven years of growth.
Ford told Reuters in a statement that reducing costs and improving efficiency remains part of its strategy to “drive profitable growth.” However, in the same statement, the automaker added that it hasn’t announced any new “people efficiency actions” (read: layoffs) and won’t comment on any speculation. The employee cuts will be voluntary, and Ford is expected to emphasize that aspect of its planned workforce reductions. Ford CEO Mark Fields told analysts that the automaker will continue to focus on costs to prepare for a possible downturn.
After Trump criticized Ford’s intention to build a factory in Mexico, the automaker scrapped its plans and added 700 jobs in Michigan instead. Fields stressed the decision wasn’t political but was a business move that reflected the slow sales of small cars. In March of this year, Ford announced a $1.2 billion investment in three of its facilities in Michigan and the addition of 130 jobs in a project that was part of an earlier deal with the United Auto Workers union.