Ford inches higher as reports surface that it plans to cut 10% of its workforce

Shares in Ford Motor Company (NYSE:F) edged higher in pre-market trading on Tuesday as reports suggested that the US carmaker is planning to cut 10% of its global workforce.

The “people efficiency actions” – first reported in The Wall Street Journal – are part of the company’s plans to save US$3bn this year.

By trimming its cost base, Ford hopes it can return to growth and reinvigorate a declining share price.

The firm sold 215,000 vehicles in April, 7% fewer than during the same month a year earlier.

Since chief executive Mark Fields took the helm almost three years ago, the best part of US$20bn has been wiped from the company’s market valuation.

Ford spokesman Mike Moran refused to comment directly on the reported job losses but said in a statement that the company was focused on driving “profitable growth”.

He added: “Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation.”

Car sales on the way down

The carmaker, which is the second largest in America, currently employs a little over 200,000 people across the world, with almost half of those based in North America.

After enjoying several years of growth at the start of the decade, it has hit choppier waters over the past year or so as sales and profits fall.

Last month, car sales in Europe dipped by 6.6%, the first fall since 2012. It was worse still in the UK, where April’s sales figures fell by almost 20% although this was partly due to a change in vehicle licensing rules.

Shares in Ford were up 1% to US$10.95 in pre-market trading.

Story by ProactiveInvestors