Ford plans to cut between 4,000 and 5,000 white collar jobs in North America by the end of the year.
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The cuts account for about 10 per cent of the North American salaried workforce of the world's second-largest carmaker.
A Ford executive said he expected the job losses to take place by December, and added that the firm would be offering "very good packages" to long-standing employees.
The executive said: "We've become much more efficient and the jobs are not needed any more. It's an incredibly competitive market and the economy has slowed."
The Detroit Newshas reported that Ford is expected to take a charge of about $1 billion against its third-quarter earnings to cover the initial cost of the job cuts.
The New York Timesreports that Ford's management has also begun reviewing the possible delay of some planned new models, which would reduce the company's design and engineering costs.
Ford was once thought to be in a position to overtake General Motors as the world's leading carmaker. But its momentum was halted last August with the recall of 6.5 million Firestone tyres, many of which were installed as original equipment on its popular Explorer four-wheel-drive models.
Ford lost £540 million in the second quarter to June 30th, in large part due to the costs of replacing the Firestone tyres and restructuring charges involving Mazda, in which it owns a one-third stake.
PA