Ford (NYSE:F) Europe announced that the company will cut hundreds of jobs in Europe in an effort to reduce costs by as much as $200 million a year. The company will use the savings to help revamp its model lineup in the region, and hopes to return to sustainable profitability in the near future.
Ford turned a profit of $259 million in 2015 in Europe, the first profit the company has seen in the region since 2011. The company experienced a 10% gain in vehicle sales.
The company will be utilizing what is called a “voluntary redundancy scheme.” This scheme will be offered to 10,300 workers in Europe who will have the option of early retirement and severance pay. The company predicts that there will be hundreds of people who will voluntarily offer to leave their positions.
Ford’s SUVs outsold other segments in Europe for the first time ever, and the company plans to increase the amount of SUVs it sells in Europe in 2016. Ford is following a plan that has closed three European factories and reduced jobs by several thousands in Europe. The company closed two plants in Britain and one in Belgium in 2014. The company is aiming for a 6% to 8% operating margin for the long-term.