Ford will be cutting some 7,000 employees – or 10% of its worldwide salaried workforce – by the end of August as part of its restructuring plan, which has been underway since last year. The automaker says the cuts, made up of both voluntary buyouts and lay-offs, will save it around US$600 million (RM2.5 billion) annually.

The cuts were revealed in an e-mail sent out by Ford CEO Jim Hackett to employees. The reduction in the workforce is spread across many areas, including engineering, product development, marketing, finance, logistics and IT. Around 2,300 employees in the United States will be laid off, according to Reuters.

“To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work and cut costs,” Hackett wrote in the e-mail.

The lay-offs is aimed at improving efficiency. Hackett said the exercise will eliminate close to 20% of upper-level managers, a move that will reduce bureaucracy and speed up decision-making.

Ford has been restructuring its operations worldwide in a bid to improve profitability and speed product development – the company has announced cuts in Europe, South America and Russia. Hackett said the restructuring work continues in global markets, with the process expected to be completed by the end of August.

In March, the automaker had announced that it planned to cut over 5,000 jobs in Germany, and was also aiming to reduce its workforce in the UK, offering voluntary redundancy programmes for employees in both countries.