Amid pressure from shareholders over its underperforming stock price, Ford has confirmed it will shed 10 percent of its salaried workforce in North America and Asia.
The automaker said it plans to accomplish the cuts through voluntary buyouts and early retirement packages. In all, the 10 percent reduction in its salaried workforce translates to 1,400 positions, according to USA Today.
The job cuts come following healthy profits and record sales in recent years, though the numbers have been on the decline since the start of 2017. Ford said it will focus on “becoming as lean and efficient as possible.”
The reduction will occur in all Ford departments save for product development, manufacturing, and the automaker’s internal credit division. The cuts will be completed by October.
Second-generation Ford Fusion Hybrid automated driving research vehicle
Investors simply aren’t fired up about Ford, who’ve said the automaker has yet to show it’s poised to take advantage of new mobility services and technology such as self-driving taxis. That’s despite Ford making significant investments into artificial intelligence companies to speed up its self-driving car programs.
Tesla, on the other hand, continues to swell in value, despite not turning a profit and employing risky manufacturing techniques. Investors have bought into what Tesla CEO Elon Musk has sold, and it continues to work for the company.
To potentially make matters worse—while investors portray Ford as behind the times—the U.S. auto market is said to have plateaued. That means Ford will need to seek out additional areas to boost profits.
It remains to be seen if a leaner Ford encourages Wall Street. Following initial reports of Ford’s impending job cuts, investors hardly rallied. In fact, Ford’s stock price barely budged this week.