Ford reportedly plans to cut 10% of its workers
Ford Motor Co. is reportedly planning substantial job cuts in order to boost profits and raise its stock price.
The Wall Street Journal reported that the cuts would target salaried employees and would reduce Ford’s global head count by about 10%.
The cuts are said to largely target salaried employees. It’s unclear whether hourly factory workers are included, the newspaper said.
Ford did not confirm the report.
In a statement, the Dearborn, Mich., automaker said it is focused on reducing costs and improving efficiency. But Ford said it hasn’t announced any job cuts and won’t comment on speculation.
Investors are concerned that U.S. auto sales are peaking and Ford’s market share is slipping.
Ford’s shares have lost more than a third of their value since Mark Fields became chief executive in 2014. Electric car maker Tesla Inc., led by Elon Musk and based in Palo Alto, recently surpassed Ford in market value even though Tesla sells far fewer vehicles.
Michelle Krebs, an analyst with Autotrader, said Ford may be taking a prudent action to prepare for declining U.S. industry sales.
“Belt tightening comes as no surprise with sales softening and profits squeezed,” Krebs said. “Ford has been under particular pressure to take action to boost its stock price. The board meeting last week likely added pressure to get specific about cost cuts.”
During the company’s annual meeting last week, a number of shareholders pressed Ford’s management about the company’s stock.
“Look, we’re as frustrated as you are by the stock price,” Ford Executive Chairman Bill Ford said. “And a couple of people have said, ‘Well, does the Ford family care about the stock price?’ The short answer is yes, a lot. Much of our — most of our net worth is tied up in the company. And the stock price matters a lot to us.”
Shares of Ford rose 2 cents, or 0.2%, to $10.94 on Tuesdayt $10.94.
The Associated Press and the Detroit Free Press/McClatchy contributed to this report.
3:25 p.m.: This article was updated with Ford stock’s closing price.
This article was originally published at 7:50 a.m.