US automaker Ford Motor is making plans to cut about 10 per cent of its global staff, which could mean about 20,000 jobs worldwide, according to a media report.
Most of the jobs will be salaried workers who do not have union protection, rather than the 57,000 US hourly staff who work on assembly lines, CNN quoted The Wall Street Journal as saying in the report on Monday night.
The company did not confirm or deny the report, saying only that “reducing costs and becoming as lean and efficient as possible” is one of its key priorities, but that it has yet to announce any new job cuts.
Ford announced last month that it was looking to reduce costs by $3 billion in order to offset efforts to invest in “emerging opportunities”.
The company has said that efforts to develop the next generation of electric and self-driving cars would lead to a lower profit margin in the near term. Those are expensive, long-term bets that will take some time to pay off, if they ever do.
Ford announced the $3 billion cost cutting goal at the same time it reported sharply lower first quarter earnings, reports CNN.
The company has been under pressure from shareholders about declining profits and a weak share price. Earlier this year shares of electric car manufacturer Tesla (TSLA), which is a fraction of Ford’s size, passed Ford in terms of market value.
But Ford and other US automakers have also been under pressure from President Donald Trump to create US jobs.
Ford won praise from Trump when it announced in January that it was scrapping plans for a plant in Mexico and would invest $700 million in a Michigan plant to build electric and self-driving cars, CNN reported.
But the company is still moving ahead with plans announced last year to shift all small car production to Mexico.
Plans for the next Mexican plant were dropped because of lower demand for small cars altogether. The small cars that were to be built there will now be built at another Mexican plant.