Ford Asks Underperforming Employees To Choose Severance Or Performance Improvement: Report

Ford Motor Co F has chosen an alternative approach to deal with its white-collar employees deemed underperformers.
The automaker has conveyed to its managers that the underperforming workers should choose between severance or a performance enhancement program, WSJ reports.
Also Read: Ford Credit CFO Schaaf To Retire; Eliane Okamura Named Successor
The change will mostly apply to employees who have eight or more years of service with a consistent decline in performance.
The report added that the amended policies, which apply to all U.S. salaried workers, went into effect on October 1, 2022. The change is expected to simplify managers' work in dealing with poor performance.
Employees with less than eight years' experience can skip the performance-enhancement plan and opt for an involuntary separation with severance.
The new policies are part of Ford's plan to cut costs by $3 billion annually by 2026. The saved amount will be used to fuel Ford's long-term transition to electric vehicles.
"We absolutely have too many people in certain places, no doubt about it. And we have skills that don't work anymore and we have jobs that need to change," the report cited CEO Jim Farley's speech on a July earnings call.
In August, the company laid off about 3,000 salaried and contract workers in the U.S., Canada and India.
Also See: Stellantis' China JV GAC-FCA To File For Bankruptcy
Price Action: F shares are trading higher by 1.35% at $13.55 in premarket on the last check Tuesday.
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