The Ford company announced its long-awaited restructuring plan on Monday that, “they will cut about 10% of its 70,000 workers”. Not just this they will parting way with 7000 white-collar employees worldwide. Not just white-collar’s in fact contract workers will also lose their jobs, however, the company didn’t specify how many. Ford didn’t say what divisions might see the most losses. However, a bulk of about 7000 employees eliminated jobs are likely to come from the ford’s decision to close a plant and leave the South American commercial truck market. Ford said the cuts will be complete by August. In the United State, about 2,300 jobs will be cut through buyouts and layoffs. About 1,500 have left voluntarily or with buyouts, though another 300 have already been laid off. About 500 workers will be let go starting this week, largely in and around Ford’s headquarters in Dearborn, Michigan, just outside Detroit. The layoffs are coming across a broad swath of the company including product development, engineering, marketing, logistics, finance, information technology, and other areas. But the Ford also said it is hiring in some critical areas including those developing software and dealing with electric vehicles and self-driving.
The Reason behind All This…
Hackett’s said, “To succeed in our competitive industry, and position Ford Company to win in a fast-charging future, we must reduce bureaucracy, speed decision making, empower managers, and focus on the most valuable work, and cost cuts,”. It is the second set of layoffs for Detroit-area automakers, even though the companies are making big profits. Sales in the United State, where the automakers get most of their revenue, have fallen slightly but still are strong. In November, General Motors announced it would shed up to 14,000 employees as it cut expenses to prepare for a shift to autonomous vehicles and electric. The layoffs included the closure of five factories in Canada and U.S. and cuts of another 8,000 white-collar workers worldwide. About 6,000 blue-collar positions were cut, but most of the laid-off factory workers in the United State will be placed at other plants mainly that build trucks and SUVs.
Hackett wrote lines for their employees, ”Ford is a family and saying goodbye to colleagues is emotional and difficult”. He also told workers that under the restructuring, managers now will have 7 people reporting to them on average, and up from 5 before changes were initiated began. And that reduces management bureaucracy by 1/3 from before the “Smart Redesign” began. Hackett’s also said, “Before the restructuring, Company had 14 organizational layers, but that will drop to 9 by the end of the year”.
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