Ford Motor Company announced hundreds of layoffs in Europe today, mostly in the United Kingdom and Germany.
The American car company is struggling overseas. It lost $404 million during the second quarter in Europe, and analysts expects it will lose a full billion dollars by the end of the year.
European sales for Ford are down 12 percent this year, and 27 percent in August alone, reflecting the economic troubles in Europe. All car sales throughout the European Union were down 8.5 percent in August.
The layoffs will be voluntary, and Ford will be offering buyout programs aimed at reducing their workforce by several hundred full-time positions. It is also cutting temporary positions and outsourcing.
Ford is also considering plant closures and contract renegotiation, tactics it used to shore up its business in North America, which has rebounded in the last few years. Ford is now the second largest American car manufacturer.
"I think we have a track record in terms of understanding what needs to be done and having the will and the ability to execute it," said Bob Shanks, chief financial officer.
Despite the layoffs, Ford still plans to release 15 new or redesigned models in Europe in the next five years in a long-term plan to revitalize sales, including the Mustang, Edge, Escape, Fusion, and a small sport utility vehicle.
These new models will likely be larger than typical European cars, as they are more profitable than smaller cars.
The vast majority of Ford's profit comes from North America, where it made over $2 billion in the second quarter of this year. Cars are larger in that market, and profits on each car are substantially higher.
Ford has refrained from heavily discounting its European models in the wake of the financial crisis, a tack other European automakers took. Still, every automaker in Europe, aside from Volkswagen is struggling.
