Ford Motor Company F has made the announcement to cut 7,000 jobs throughout the world by August, per Reuters. This amounts to elimination of around 10% of its global white-collar workforce. This move is in sync with the Dearborn, MI-based company’s restructuring plan as it is preparing for the future of autonomous and electric vehicles.
The layoffs cover broad areas of the company’s operations, including engineering, product development, marketing, information technology, logistics, finance and other areas. However, the company has revealed that it is hiring people for developing software, and in the areas of self-driving and electric vehicles.
With this restructuring measure, the auto giant will save about $600 million annually. Also, this will reduce bureaucratic control and expedite decision making.
Notably, in November 2018, General Motors Company GM made the announcement to realign its manufacturing capacity and reduce blue-collared salaried workforce in an effort to improve business performance. However, the job cuts received the wrath of President Donald Trump and the Congress. In fact, huge capital requirement to update current vehicles and develop those for the future might have necessitated the job cuts.
In fact, Ford has been restructuring operations globally to enhance profitability, speed up product development and announce job cuts.
Over the past six months, shares of Ford have outperformed the industry it belongs to. During the said period, shares of the company have gained 12.9% against the industry’s decline of 7.1%.
While Ford currently carries a Zacks Rank #2 (Buy), General Motors has a Zacks Rank #3 (Hold).
A couple of other top-ranked stocks in the auto space are Fox Factory Holding Corp. FOXF and AutoZone, Inc. AZO, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected long-term growth rate of 16.4%. Over the past three months, shares of the company have gained 12%.
AutoZone has an expected long-term growth rate of 12%. Share price of the company has increased 7.3% in the past six months.
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