Ford workers opened their email Monday to find a letter from CEO Jim Hackett with an explanation of how many salaried workers would be leaving the auto company this week and why.
The company’s cuts will total 7,000 workers by the end of August, including voluntary buyouts and involuntary layoffs and reductions that have already occurred.
The cuts include 500 salaried workers in the U.S. who will leave involuntarily this week and 800 in the U.S. by August.
The move comes as Ford is under pressure from investors to reduce costs and improve its profitability, with a particular emphasis on bloated overseas operations.
“To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work and cut costs,” Hackett wrote. “This required intensive work across multiple layers of our company.”
Most workers will be notified this week, he said.
He noted that restructuring will continue in Europe, China, South America and elsewhere with hopes of completing the reorganization by the end of August.
“The time and effort from so many of our team members is helping to make us a stronger company, well positioned for the future,” Hackett wrote.
Overall, by the end of the process later in August, Ford will have eliminated about 10% of its global salaried workforce, Hackett wrote. Annual savings will total $600 million.
“This includes both voluntary and involuntary separations over the past year. Within that total, and consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20%,” he wrote. “We also made significant progress in eliminating bureaucracy, speeding up decision making and driving empowerment as part of this redesign.”
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Hackett added, “Ford is a family company, and saying goodbye to colleagues is difficult and emotional. 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. We also have a range of resources and services in place to support employees in managing this transition. I hope that you take a moment to thank them personally for their service and commitment to Ford.”
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