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In a letter to employees today, Ford Motor Company CEO Jim Hackett announced the termination of 500 salaried workers. The number of terminations is expected to grow to 7,000 globally by the end of August as the domestic automaker continues restructuring.
Ford says the number will grow to 800 by the end of June, confirmed it Hackett’s letter entitled “Smart Redesign Update.”
The cuts equate to about a 20 percent reduction in Ford’s global management structure and 10 percent of its overall workforce, a move that will eventually save the company $600 million per year. In addition to the savings, Ford says the cuts will also streamline decision-making and empower employees.
Employees who’s jobs are being eliminated are being met with a slightly nicer approach than usual, according to Hackett.
“Ford is a family company and saying goodbye to colleagues is difficult and emotional,” Hackett wrote. “We have moved away from past practices in some regions where team members who were separated had to leave immediately with their belongings, instead giving people the choice to stay for a few days to wrap up and say goodbye.”
Today’s announce comes in addition to 1,500 employees who took buyouts and left the automaker voluntarily last year. Each round of employee cuts is part of a broader $11 billion restructuring of the company, which also includes the elimination of nearly all sedans from its North American lineup and more aggressive investments into electrification and autonomous vehicles.
