DETROIT -- Ford Motor Credit will cut 20 percent of its U.S. work force as auto sales plunge and the company provides financing for fewer brands.
About 1,200 jobs will be eliminated by the end of July, Ford Credit spokeswoman Margaret Mellott told Automotive New. The move follows a 21.8 percent decline in Ford Motor Co.s U.S. sales last year, spurred in part by the sale of the Jaguar and Land Rover brands to Indias Tata Motors.
This will help keep our costs in line with the level of receivables we have, Mellott said.
Ford Credit outlined the moves today as it posted a $228 million fourth-quarter net loss on lower loan volumes and higher provisions for credit losses. For the year, the finance unit had a net loss of $1.5 billion, following a profit of $775 million the previous year.
The Ford Credit job cuts will begin in mid-February, Mellott said. The 1,200-position reduction will be achieved primarily through involuntary layoffs and include some planned attrition and retirement. Ford Credits headquarters in suburban Detroit, regional business centers and field staff will be affected.
In addition to dropping Jaguar and Land Rover, Ford Credit is moving away from writing loans for Mazda. Ford reduced its stake in the Japanese automaker in November to raise cash.