Mazda Layoffs Announced Via Memo

10 January, 2016

Strong yen and low international export sales have hurt Mazda financially. As a result, a three-tiered Mazda layoffs plan apparently will go into impact soon.

Helping the company with cost improvements

Evidently, Mazda has 701 employees that work for it in the States. CEO of Mazda North American Operations, Jim O’Sullivan, sent out a corporate memo on March 7 that Automotive News got a hold of. He did not make the difficulties the company is facing seem little.

According to O’Sullivan, Mazda is “in the midst of an extremely challenging business environment,” and that means “it has become necessary for us to re-examine our business to accelerate further cost improvements.”

O’Sullivan was followed by Mazda spokesman Jeremy Barnes who said cost improvements are coming soon.

Huge loss for the year

Financial difficulties at home have rippled across the ocean into Mazda’s U.S. operations. A recent financial disclosure from the automaker’s parent office noted that as the current fiscal year ends on March 31, Mazda expects to post a loss of 100 billion yen ($1.2 billion). Automotive News reports that this would be the automaker’s largest financial loss in 11 years. Analysts indicate that the cause of Mazda’s record slide is linked to a strong yen value, a financial stumbling block for such an export-dependent car maker.

Still doing layoff

Vehicle sales in the United States are up 48 percent in the last 12 months for Mazda. Mazda North America also showed surge in the first three quarters of the fiscal year. Still, Mazda needs to make drastic change because of its bad financial situation.

Various stages

There are three stages of layoffs that will happen, the corporate memorandum explains. These are the three stages:

1. There will be some voluntary separation packages offered to employees. Employees have to apply by April 16, 2012 to get a chance of getting a package. The business will decide who qualifies for it by April 27. These packages will contain a lump pay dependent upon how long the employee worked there, help finding a brand new job and separation pay.

2. A redeployment system designed to “restructure the organization to reflect a smaller work force” will be used starting on May 16, 2012 for some Mazda employees.

3. Beginning May 29, 2012, Mazda will analyze the crop of remaining U.S. employees if not enough of them were downsized in steps one and two. Depending upon the automaker’s financial needs at this stage of the restructuring, Mazda will designate a certain number of workers for involuntary separations. Employees notified during this phase will not be eligible to receive the same enhanced benefits package that was offered during the voluntary separation phase of the company’s cost restructuring. These workers will remain in their jobs until August 3.

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