Ford says the first wave of layoffs will begin on Tuesday and will include 500 salaried workers in the U.S. this week. The terminations should be complete by the end of August. About 2,400 of the 7,000 layoffs are in North America, and 1,500 of the positions will be eliminated through a voluntary buyout offer, reports the Associated Press.
According to a letter CEO Jim Hackett sent to employees Monday morning, the job cuts are being implemented to cut bureaucracy within the company and flatten the management structure. Besides cutting costs, the automaker said the restructuring will streamline its decision-making process at the management level, according to Fox News.
Most of Ford’s layoffs will affect workers at its headquarters in Dearborn, Michigan. The automaker is following in the same path that General Motors took in November when the company eliminated about 8,000 non-union jobs, or 15 percent of its salaried and contract workers.
General Motors also closed five factories in North America along with the layoffs, reports CNN News.
Ford has been busy over the past several months working to restructure the company. Last year, the company committed to spending about $11 billion globally in reshaping its business – with the hopes of spurring overseas sales and modernizing its fleet of vehicles to include more electric and autonomous driving tech.
The company has not been forthcoming on how the $11 billion will be spent, although the automaker says it will close three plants in Russia, one factory in Europe and another in Brazil. Ford says the move represents about $1 billion of the $11 billion restructurings it plans to do.
“Ford is a family company and saying goodbye to colleagues is difficult and emotional,” Hackett said in the email. “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.”
