Ford Motor Co said on Wednesday it plans to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives as the No. 2 US automaker looks to boost its sagging stock price.
A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by October 1, but does not plan cuts to its hourly workforce or its production.
Ford's plans to possibly cut its global workforce was first reported by the Wall Street Journal.
Ford says that it has three priorities in its strategy, aiming to drive profitability and value. "We have not revealed any new individuals efficiency actions, nor do we discuss about speculation".
Ford last month committed to cutting costs by $3 billion this year, despite that commodity prices are up by $1 billion.
There was no immediate comment from President Donald Trump, who has needled Ford about taking jobs to Mexico but celebrated the company's USA investments.
Ford Motor Co. has announced about 1,400 job cuts coming this summer, all of those expected to be salaried employees. Ford is also spending heavily on future technology, like self-driving and fully electric cars. April saw Ford sell 214,695 vehicles, approximately 7.2 percent fewer than the same period one year earlier. It is thought that most of the cuts will target salaried employees.
Ford Motor is planning to cut about 10 percent of its jobs around the world as the beleaguered automaker makes a new push to increase profits and lift a stock that is lagging near a five-year low.
"What's more, the US auto market, where Ford makes the bulk of its profit, appears to have peaked", USA Today added.
The company has been under pressure from shareholders about declining profits and a weak share price.
Ford's stock price has fallen almost 40 percent in the three years since Mark Fields became CEO. Salaried and hourly workers in Ford's plants won't be affected.
After it faced criticism from US President Trump in January, Ford scrapped plans for a new $1.6 billion vehicle factory in Mexico. That's despite Ford making significant investments into artificial intelligence companies to speed up its self-driving auto programs.