Ford plans job cuts to boost profits

Ford told its employees this morning that it plans to cut 10% of its salaried workforce in North America and Asia, or about 1,400 employees as the automaker wrangles with falling profits and pressure to boost its stock price amid slowing US industry sales.

With an estimated 30,000 salaried workers in the US, Ford, facing dropping stock prices, will on October 1 offer early retirement buyouts for an undisclosed number of employees in North America and Asia, according to Reuters.

Shares in Ford Motor Company (NYSE:F) edged higher in pre-market trading on Tuesday as reports suggested that the U.S. carmaker is planning to cut 10% of its global workforce.

The auto giant declined to comment on the reports job cuts but said that it remained focused on its core strategies to boost profitable growth.

In April 2017, Ford said it plans to reduce its cost base by about US$3 billion.

But Ford and other USA automakers also have been under pressure from President Donald Trump to create U.S.jobs. Ford has almost 30,000 salaried employees in the USA and over 200,000 worldwide.

Ford announced in 2015 it is investing $4.5 billion to add 13 new electric and hybrid vehicles by 2020 as it sought to position itself as a mobility company.

Ford did not confirm the report to news agencies Monday evening.

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A Ford spokesman said the reductions will affect corporate staff, including the finance, legal, human resources, communications, government, marketing, sales and service departments.

"We are continuing our intense focus on cost and the reason for that is not only mindful of the current environment that we're in, but also I think preparing us even more for a downturn scenario", added Mark Fields, Chief Executive.

The cuts are the biggest to Ford's USA white collar staff since 2007, when 7,200 workers took voluntary buyout packages.

In January, Ford also added 700 MI jobs, following criticism from Trump over plans to increase production in Mexico.

"The company's performance has been lagging, even during times when the US market was doing extremely well", said Sascha Gommel, a Frankfurt-based automotive analyst at Commerzbank.

But the company is moving ahead with plans announced a year ago to shift all small auto production to Mexico.

Ford shareholders last week criticized company leaders over what one investor called the "pathetic" performance of the automaker's shares and questioned how the board can continue to support Fields, who's been CEO since July 2014.

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