Published on: May 21, 2019

The automotive industry, which has seen a significant shift as automakers deal with changing consumer demands and the implementation of automation, has announced 19,802 job cuts through April. That is 207% higher than the 6,451 automotive sector cuts announced through the same period last year, according to tracking from global outplacement and executive and business coaching firm Challenger, Gray & Christmas, Inc.

The total announced cuts for the first four months of this year is the highest since 2009, when 101,036 cuts were announced in the auto sector through April.

Ford’s May 20th announcement that it would cut 10% of its current salaried workforce, including at plants overseas, is an attempt to reduce bureaucracy and boost profits in a field seeing more and more competition outside of the Big Three automakers.

“As consumers in the U.S. demand vehicles with lower emissions, more energy efficiency, and autonomous driving options, tech companies like Tesla and Google’s parent company, Alphabet, have entered the fray,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.

“Automakers, like many companies pivoting to include new technology, must become nimble in order to make decisions as rapidly as the technology evolves,” he added.

Ford’s plan comes nearly six months after General Motors announced the closure of five plants and a 15% reduction in salaried staff, resulting in 14,000 job cuts. Meanwhile, Tesla announced over 3,000 job cuts in January.

“When automakers announce job cuts, especially if they include plant closings or the end of production of a certain type of vehicle, a trickle-down effect occurs as suppliers lose contracts,” said Challenger.

In fact, Challenger tracked 859 job cuts announced from auto suppliers since December 2018.
“Job cuts in this sector are likely to continue, especially with the implementation of additional tariffs on Chinese goods. Automakers and suppliers will feel the pressure, which may lead to more cuts,” said Challenger.

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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.

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