Ford is to cut around 7,000 jobs worldwide, including an unconfirmed number in the UK, as part of an organisational restructure that will prepare it for declining demand for cars and the shift to electric vehicles.
The cuts represent 10% of its global workforce and 20% of its management positions, including marketing and communications. They are expected to save the company £471 million a year.
Ford first announced a major shake-up of its operations in January. It employs 12,000 people in the UK but was unable to share details about how many positions would be affected, although some media reports put the number at 550.
In a memo to staff, Ford chief executive Jim Hackett said the restructuring plan would start immediately, with most of the job losses completed by the end of August.
“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 and focus on the most valuable work, and cost cuts,” he said.
In a statement, Ford said the action was necessary to “position Ford for success today and yet preparing to thrive in the future”.
It added: “Initiatives are expected to reduce in excess of 5,000 jobs in Germany, including hourly, salaried and temporary staff. The total number of positions impacted in the UK is still to be determined.”
The news follows an announcement by General Motors last November to stop production at five factories in North America with the loss of more than 14,000 jobs. It also plans to close three plants outside the US by the end of the year. The move will save it an estimated £4.7 billion by the end of 2020.
In January, Jaguar Land Rover also confirmed it would cut 4,500 jobs globally as part of its ‘Charge and Accelerate’ programme.