Ford Motor Company is planning to cut roughly 10 percent of its global workforce in an effort to cut $3 billion in costs as the company faces slower car sales and increased spending new technologies.
According to the Wall Street Journal, the company outlined these job cuts early this week, cuts which they expect will hit mostly salaried employees.
While a spokesperson with Ford could not confirm the report, the company did say, in an official statement: “We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities. Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation.”
In addition, Chief Executive Mark Fields has been under more and more pressure with the company’s profits slowing down, pulling the stock price down with it. Although the company’s flagship F-series seems to be selling quite well, Ford also has some significant gaps in its product lineup which have put it at a disadvantage to competitors. In the meantime, though, it has initiated more spending on new strategies, including a $4.5 billion initiative for new electric vehicles and an autonomous cars projects slated for completion by 2021.
All that in mind, though, the company projects $9 billion in pre-tax profit this year, which is significantly lower than the numbers in 2016, which saw $10.4 billion in profit.
In an April conference call with analysts and media, Fields said, “We are continuing our intense focus on cost and the reason for that is not only mindful of the current environment that we’re in, but also I think preparing us even more for a downturn scenario.”
Of course, trying to cut down the headcount for a company the size of Ford is not going to be easy. After all, automakers have been under direct pressure from President Donald Trump to implement more manufacturing jobs in the United States (instead of, for example, sending them to the plants in Mexico).