The job cuts which have been underway since last year will save about $600 million per year by eliminating bureaucracy and increasing the number of workers reporting to each manager

American multinational automaker Ford is cutting nearly 7,000 white-collar jobs, which would make up 10 percent of its global workforce.

The company is undertaking a major restructuring and said that it will have trimmed thousands of jobs by August.

The major revamp, which had been underway since last year, will save about $600 million per year by eliminating bureaucracy and increasing the number of workers reporting to each manager.

In the US about 2,300 jobs will be cut through buyouts and layoffs. About 1,500 have left voluntarily or with buyouts, while another 300 have already been laid off. About 500 workers will be let go starting this week, largely in and around the company's headquarters in Dearborn, Michigan, just outside Detroit.

In a memo to employees on May 20, CEO Jim Hackett said the fourth wave of the restructuring will start on May 21, with the majority of US cuts being finished by May 24.

"To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts," Hackett wrote.

It's the second set of layoffs for Detroit-area automakers, even though the companies are making healthy profits. Sales in the US, where the automakers get most of their revenue, have fallen slightly but still are strong.

Ford's white-collar employees had been fearful since last July when the company said the restructuring would cost $7 billion in cash and hit pre-tax earnings by $11 billion over the next three to five years. Many have been upset that it took so long for the company to make decisions.

Factory workers have not been affected by the restructuring thus far, as the company has retooled car plants so they can build more popular trucks and SUVs.

The layoffs, while large, weren't as bad as many had expected. Morgan Stanley analyst Adam Jonas predicted 25,000 white-collar job cuts late last year, a number that Ford would not deny.

Hackett said in the memo that Ford is departing from past practices and letting laid-off employees stay a few days to wrap up their jobs and say good-bye to colleagues. In the past, laid-off workers would have had to pack up and leave immediately.

"Ford is a family company and saying goodbye to colleagues is difficult and emotional," Hackett wrote.

Hackett told workers that under the restructuring, managers now will have seven people reporting to them on average, up from five before changes were initiated began.

(PTI)