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.
A source familiar with the plan told CNBC Ford’s cuts will involve primarily salaried workers in North America and Asia. Hourly jobs, particularly in North America, will not be cut as the company works to keep up with demand for new vehicles, which remains relatively strong.
Worldwide, Ford employs about 200,000 people.
In a statement, Ford would not confirm it is slashing jobs.
“We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities,” the company said in a statement. “Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation.”
Unlike job cuts in the past, this time Ford’s moving to slash costs while the company is solidly profitable. In fact, 2016 was the second most profitable year ever for the company. But with Ford spending heavily on autonomous-drive, electric vehicles and mobility solutions, investors are wondering how much those investments will cut into future profits.
During the company’s annual meeting last week, Ford Chairman Bill Ford was asked about the company’s slumping stock, which is hovering near a five-year low.
“We’re as frustrated as you are by the stock price,” said Ford during the company’s annual meeting. “The Ford family wants the stock to go up. Our net worth is tied up in this company, of course we want it to go up.”
Since CEO Mark Fields took over in July 2014, Ford’s stock is down 36 percent.