Following a report that Ford could be on the verge of cutting up to 20,000 jobs from its worldwide operations, it has emerged that the carmaker may target thousands of its employees with salaried buyouts.
According to The Detroit News, claims about 10 per cent of Ford’s staff being axed are too high and that no final decision has been made about the employee reductions. Sources close to the situation now say Ford will look to buyout many of its employees but at this stage, it isn’t known what form these buyouts could take.
Companies that buyout employees will often provide a large severance package that could include a month of pay plus an additional week of pay per year the employee has worked. In more extreme cases, carmakers can spend six figures to buyout certain union employees while also agreeing to pay certain benefits, including health insurance.
Certain sources believe that by targeting white-collar workers with its job cuts, Ford could avoid some scrutiny from President Trump who has insisted that companies bring production back to the shores of the United States and therefore create more blue-collar, assembly line jobs.
Ford’s decision to cut employees comes on the back of falling sales and profit. The company has also set aside $4.5 billion to develop a fleet of electrified vehicles, and intends on launching its first autonomous car in 2021.
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