Is the Latest Workforce Cut a Sign of Things to Come for Ford Stock?

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Ford stock - Is the Latest Workforce Cut a Sign of Things to Come for Ford Stock?

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According to Bloomberg, Ford (NYSE:F) has announced that it is mulling over downsizing its workforce in a bid to reorganize according to the company’s plans. The move is in sync with this Dearborn, MI-based auto giant’s strategy to lower costs for enhancing efficiency and jacking up the Ford stock price. Notably, year-to-date, shares of F have plunged 27%.

Ford stock performance

Ford, the second-largest U.S. automaker, is currently not enjoying a robust health. This has led the company to inform its employees that they will encounter unspecified job cuts as part of its $11 billion restructuring program. Per reports, some of these lay-offs will be accomplished by lessening the company’s salaried staff. More details on job retrenchments are likely to emerge by second-quarter 2019. Regions mostly suffering on the monetary front, such as Europe, Asia and South America, are likely to witness the deepest slashes in the Ford workforce cut.

Recent Issues for Ford Stock

During second-quarter earnings release, F trimmed its 2018 profit forecast due to a sharp decline in the bottom line. At that point of time, chief executive officer Jim Hackett announced the company’s $11 billion cost restructuring initiative, but kept details of the plan under wraps.

Crippled with its aging vehicles’ line-up, Ford’s U.S. sales in September dropped below the figures posted by General Motors Company (NYSE:GM), Toyota (NYSE:TM) and even Fiat Chrysler (NYSE:FCAU). As a consequence, investors are avoiding the Ford stock and its credit rating has been downgraded.

Currently, F stock has a Zacks Rank #4 (Sell) and shares its weak rank with GM. Meanwhile, Toyota carries a Zacks Rank #3 (Hold) and Fiat Chrysler has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford stock, Toyota, General Motors and Fiat Chrysler have an expected long-term growth rate of 5.3%, 6%, 8.2% and 25.3%, respectively.

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Article printed from InvestorPlace Media, https://investorplace.com/2018/10/is-the-latest-workforce-cut-a-sign-of-things-to-come-for-ford-stock/.

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