Big changes are on the horizon for Ford Motor as the company seeks to buy out the contracts of 1,000 salaried employees.
According to a statement from Ford to CNBC, the motor company first announced its new buyout program to employees in July. The spokesperson said that Ford is “reshaping” its workforce — which includes hiring as well as separations — in order to align their talents and positions to allow for business transformation.
The employee buyout deal, which the company is calling its “voluntary separation program,” offers a variety of seniority-based severance packages to any employees willing to annul their employment contract with Ford. These packages are in the form of lump-sum cash severance payments and the extension of certain benefits for certain employees who “elect to, and are approved to, resign from the Company under the program,” according to the spokespersons statement.
The value of employee buyout packages on offer by the company scales with the employee’s seniority within the company, starting with one month of severance pay and benefits for Ford employees who have worked at the company for five years or less. Employees of over 20 years will receive six months of severance and benefits as well as reemployment assistance.
The global semiconductor shortage was almost certainly a major contributing factor behind Ford Motor’s decision to offer contract releases to 1,000 salaried employees. Estimates say the shortage could cost the auto industry up to $110 billion in revenue in 2021, up an astounding 81.5% from initial forecasts of $60.6 billion. Recent events have exacerbated the issue, including a drought in Taiwan, one of the world’s largest producers of semiconductors.
In June, the Michigan-based automaker slashed vehicle production across North America by idling its production plants and temporarily laying off workers. The company expects to lose roughly half of its vehicle production in the second quarter of 2021.
Another Interesting Reading: Ubisoft Reveals Tom Clancy’s XDefiant as A Free-to-play FPS