Ford Motor is laying off 7,000 salaried employees as part of CEO Jim Hackett’s restructuring plan to reduce bureaucracy, cut costs and turn the automaker into a more agile company prepared for a future that extends beyond its traditional business of producing and selling cars and trucks.
The cuts represent about 10% of the automaker’s salaried employees. Some buyouts and layoffs have already occurred, according to an email sent to employees by Hackett. The contents of the email were initially reported by the WSJ. TechCrunch has since reviewed the email.
Some 1,500 employees opted for voluntary buyouts, which occurred in November 2018, according to a spokesperson. Ford expects to complete the restructuring efforts by August globally. Cuts affecting Ford’s North American workforce will be complete by June, a Ford spokesperson told TechCrunch.
This cuts will result in annual savings of about $600 million, Hackett said in the email. “We also made significant progress in eliminating bureaucracy, speeding up decision making and driving empowerment as part of this redesign,” he wrote.
The layoffs were anticipated by employees. Ford informed employees last October that it would be restructuring the company, a move that would likely result in layoffs and voluntary buyouts.
The reorganization is part of a broader strategy to prepare for a future with autonomous vehicle technology, electrification and unconventional ownership models.
The restructuring plan is focused on making the company more agile and less bureaucratic. Each business went through a “Smart Redesign” process, according to Hackett’s email, which notes that 1,000 employees were involved in this activity.
Ford previously announced it would spend $11 billion to add 16 all-electric vehicles within its global portfolio of 40 electrified vehicles through 2022. At the heart of the company’s electrification effort is its Corktown project, a massive 1.2 million-square-foot space dedicated to its electric and autonomous vehicles businesses.
The goal of Corktown is to create a “mobility corridor” — Ford’s version of its own Sand Hill Road in Silicon Valley — that ties hubs of research, testing and development in the academic hub of Ann Arbor to Ford’s Dearborn headquarters, and finally to Detroit.
Last year, Hackett revealed several other techcentric plans for the automaker that included the introduction of an open cloud-based platform for cities to use, a partnership with Qualcomm for Cellular Vehicle-to-Everything, or C-V2X, a term that means two-way communication with stoplights, signs and other city infrastructure.