workforce roughly by 10% with an aim to keep its strategy on track
Ford, one of leading players of global automotive market, plans to cut down on 10% of its 200,000-person global workforce subject to the Chief Executive Officer’s plan to boost the company’s profits and its falling share prices. Reportedly, the company has plans to reduce its salaried workforce in Asia and North America. In addition, the company plans to cut down around USD 3 billion in costs to make up for Ford’s slower car sales and higher spending on innovative technologies.
However, in what seems like an ironic move of sorts, Ford has also increased its spending up to USD 4.5 billion with an aim to put its new electrified vehicles & autonomous cars on road by 2021.
Ford’s U.S. new vehicles’ auto sales had begun to decline for the first-time in seven years. The company’s profit has sunk by 35% to USD 1.6 billion during the first quarter of 2017, as per reports. The company’s share price has witnessed a decline and the market value has slithered behind Tesla and General Motors.
Ford’s stock price since January has also dropped by 17% to USD 10.94 per share.
The company emphasizes on its strategic move to drive profitable growth, reduce costs, and become as efficient as possible. The job cuts are likely to be outlined soon after the announcement, which will mainly target the company’s high salaried employees.
Ford, in a statement, revealed that the company will focus on its three key strategic moves which will create value and push profit. These three priorities include transforming the underperforming areas of the core business, fortifying the profit pillars in the company’s core business model, and investing prudently in emerging opportunities.
Amongst the 200,000-person global workforce, around 50% work in North America. Extensive job cuts in the United States is likely to trigger a political repercussion at the White House. The Republican U.S. President Donald Trump has frequently addressed the country’s automakers to boost the employment rates of the U.S.
Ford expects its profit to fall in 2017 as U.S. and China – the two being world’s biggest auto markets have shown sluggish car sales.
In February 2017, the company announced that it will acquire an artificial intelligence startup - Argo AI, and is likely to invest USD 1 billion in a time span of coming five years to develop and expand the firm. With automotive tech giants moving forward with driverless cars, car-sharing ventures, and other mobility experimentations, Ford does not intend to stay behind, and is expected to launch the Ford Smart Mobility LLC soon.
Satarupa develops content for Market Size Forecasters. An electrical engineer by qualification, she worked for two years in the electrical domain before switching her professional genre. Following her childhood passion, she opted for a career in writing and now pens down articles pertaining to marke...