Ford to cut 10% of global workforce as part of restructuring effort

Ford plans to eliminate 7,000 jobs, or about 10 per cent of its global workforce, as part of its ongoing, $11 billion (€9.85 billion) effort to restructure its business.

The move is expected to result in about $600 million (€537 million) in annual savings for the company, chief executive Jim Hackett said in a letter to employees on Monday.

Of the job cuts, 2,300 will be in the US, Mr Hackett said, adding that the group will have reduced its management structure by almost one-fifth at the end of the process.Around 500 jobs could be cut in the UK operations.

The announcement comes as a review of Ford's Irish operation is expected to see nearly 20 jobs cut from its Cork office, with staff either departing or offered re-assignment to the UK or mainland Europe operations. The company currently employs just over 30 in its Irish head office.

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In a statement earlier this month, Ford Ireland said: “We confirm that we have entered into formal consultation regarding a proposal to further align our market representation in the UK and Ireland.”

The brand has saw its Irish market share slip in recent years, from 10 per cent of new car sales in 2016 to 8.6 per cent for the current year to date. Key models such as the Mondeo and Focus have suffered as car buyers move to crossovers, where Ford has been relatively slow to deploy competitive models.

The company is shedding costs and attempting to stem losses outside of the US in order to position the business to push into new areas such as electric cars, where it currently lags behind competitors.

Mr Hackett said the redesign of the business will include reducing the entire company to nine layers of management, down from 14 before the process started.

Global struggle

So far, much of Ford's efforts have been focused on its struggling international operations in Europe, South America and China.

Mr Hackett said a company-wide effort to revamp the business included 1,000 staff and came up with more than 5,000 initiatives or changes within the organisation.

Ford is not alone in cutting costs. General Motors last year announced plans to shed seven plants and lay off thousands of workers to refocus its product line-up on the sport utility vehicles increasingly demanded by carbuyers.

Ford initiated similar moves last year, killing off all but two of its traditional passenger car vehicles in the US.

Although solid demand in the US for its trucks helped Ford report a stronger first-quarter profit than Wall Street expected, the Michigan-based carmaker has struggled recently to offset weakness in global markets.

Earlier this year the company enacted a turnround strategy that included thousands of job cuts in its struggling European unit, the removal of dozens of western executives from its business in China, and plans to exit its heavy truck business in South America.

Although solid demand in the US for its trucks helped Ford report a stronger first-quarter profit than Wall Street expected, the Michigan-based carmaker has struggled recently to offset weakness in global markets.

Earlier this year the company enacted a turnround strategy that included thousands of job cuts in its struggling European unit, the removal of dozens of western executives from its business in China, and plans to exit is heavy truck business in South America. – Additional reporting: Financial Times Service