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Ford to Lay Off 1,400 Workers Through Voluntary Buyouts

The move is part of Ford's $11 billion restructuring and the cuts aren't due to the pandemic, the automaker says.
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Ford  (F) - Get Free Report said Wednesday that it was cutting 1,400 jobs in North America as part of its $11 billion restructuring.

The layoffs will consist of voluntary buyouts, the giant automaker told its employees in an email.

Ford told NBC that the coronavirus pandemic wasn’t the cause of the workforce reduction.

“We’re all the time making decisions to streamline the business,” Ford spokesman T.R. Reid told NBC. He didn’t rule out further job cuts.

Ford canned 7,000 salaried employees last year. It had about 190,000 workers at year-end.

Morgan Stanley analyst Adam Jonas has said Ford needs to jettison 23,000 jobs in addition to the 7,000 erased last year, NBC reports.

Ford has struggled for several years as consumers have shied away from its vehicles apart from the F-150 truck.

Morningstar analyst David Whiston sees the automaker in a tough spot.

“We think Ford will eventually turn itself around, but the coronavirus delays a recovery and a suspended dividend gives us no reason to want the stock beyond saying it's cheap,” he wrote in a July commentary.

“Ford now focuses on light-truck models in the U.S., which we think is the right move given light trucks are over 70% of U.S. industry new light-vehicle sales,” Whiston said.

“Ford's challenge is to increase share profitably while also elevating Lincoln into a global luxury brand. The mostly no-moat nature of the auto industry will make these tasks difficult. And we see headwinds from commodities, exchange, investments in mobility and electrification, and a slowing U.S. and China market hurting results for some time.”

He put fair value at $8.

Ford recently traded at $6.82, down 0.07% and has slumped 25% this year.