- Ford is cutting stock bonuses to roughly half of its middle management.
- Senior managers will decide which half of their middle management staff gets bonuses.
- The move comes only a few months after other cost-cutting measures by Ford.
Ford is tightening its belt, and this time, it’s middle management that’s feeling the squeeze. In a letter sent to employees last week, it revealed that around half of middle management won’t get stock bonuses this year. Evidently, Ford believes this move will incentivize performance – and, notably, it’s the second time in less than a year that it has cut bonuses to managers.
The stock awards, typically handed out in March and spread over three years, have long been a key incentive for retaining talent. But now it seems Ford’s sending a new message: if you’re not pulling your weight, don’t expect a payout. Senior managers are to decide which half of their middle management staff get the bonuses this time around and which do not.
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A company spokesperson speaking to The Detroit Free Press framed it as “driving a high-performance culture that recognizes and rewards employees for their business contribution.” No matter how you slice it, though, Ford’s cost-cutting spree isn’t exactly surprising.
The Blue Oval has seen its stock slip some 23 percent over the last year while other brands like GM and Tesla have gone the other direction. Doing what it can to cut costs and at the same time incentivize more efficient work might be a winning move – or at least what the powers that be at Dearborn hope.
At the same time, this isn’t a single-pronged attack on bloated costs. Last November, Ford announced plans to cut 4,000 jobs in Europe, blaming slowing EV sales and growing competition from Chinese automakers.
Those layoffs are expected to stretch into 2027 as Ford tries to streamline its bloated operations. In addition, the company cut some manager bonuses by 65 percent. “I’m proud of the progress we’ve made, but we are not fully satisfied,” Jim Farley, Ford’s CEO said at the time. Clearly, the brand still isn’t satisfied all these months later.
Farley has been vocal about transforming Ford into a leaner, more competitive automaker. Whether slashing bonuses and trimming headcount will get them there remains to be seen, but one thing’s for sure: Ford’s managers are about to find out what “cost-cutting” really means. Only this time, they will be at the receiving end.
