Ford Motor Co. announced that 7,000 employees or about 10% of its salaried staff worldwide will lose their jobs, as part of a cost-cutting effort it says will save the company about $600 million a year.
As a result, 500 Ford workers in the United States are being let go this week, the company says, and another 300 will be laid off this coming August. In total, the car manufacturer says 800 “separations” are expected in the United States.
“We understand this is a challenging time for our team, but these steps are necessary to position Ford for success today and yet preparing to thrive in the future,” Company Statement
According to a Company statement, this organizational shift is mostly finished in the U.S. Now, the downsizing will expand to the rest of the world. As a result, 10% of the company’s global workforce–which represents 7,000 people–will be let go by August.
Ford has been making cuts over the past several months as part of a massive restructuring that is expected to cost thousands of jobs across the globe. The company committed last year to spending $11 billion to reshape its business, hoping to boost sales overseas and modernize its fleet of vehicles by focusing more on electric and autonomous driving tech.
Ford faces pressure to improve its profitability. Its profit margin has lagged those of some competitors. It has announced the costs of commodities it buys, such as steel and aluminum, have increased about $1 billion annually after tariffs were imposed on those products, even though it sources most of those raw materials from domestic mills. But its executives have said the effort to reshape the business is part of a longer term strategy and not a response to those increased costs.