New York (CNN Business)Ford is cutting 7,000 white-collar jobs, or about 10% of its salaried staff worldwide, as part of a cost-cutting effort it says will save the company about $600 million a year.
Ford (F) says workers will begin to be notified of cuts starting Tuesday, and the terminations will be completed by the end of August. About 2,400 of the jobs cuts are in North America, and 1,500 of the positions will be eliminated through a voluntary buyout offer.
The move is an effort to cut bureaucracy within the company and flatten the management structure in addition to its desire to cut costs, according to a letter CEO Jim Hackett sent to employees Monday morning.
Ford’s layoffs are similar to white-collar job cuts rival General Motors (GM) announced in November, but GM’s cuts were deeper. GM eliminated about 8,000 non-union jobs, or 15% of its salaried and contract workers. It also closed five North American factories as part of that announcement.
Ford has been making cuts over the past several months as part of a massive restructuring that is expected to cost thousands of jobs across the globe. The company committed last year to spending $11 billion to reshape its business, hoping to boost sales overseas and modernize its fleet of vehicles by focusing more on electric and autonomous driving tech.
But Ford has been slow to give details of how it will spend the $11 billion and what jobs might be cut as part of the restructuring of the business. It has said it will close three plants in Russia, one factory in Europe and another in Brazil. But it has said the moves announced so far represent only about $1 billion of the $11 billion restructuring it plans to do.