Ford cuts $300 million from IT budget

Ford Motor Co. is cutting its IT budget by US$300 million, or 20 percent, as part of ongoing cost-cutting efforts, Ford spokesman Paul Wood said yesterday.

Wood said the move, part of Ford's $9 billion restructuring announced in January 2002, was in line with the company's decision to attack costs across all lines of the business. "We're looking at everything," he said. "We're not just targeting IT."

According to Wood, Ford is now in the process of evaluating exactly which projects would be affected by the cuts, and he said some of the company's 2,800 contract IT workers could lose their jobs. Ford currently employs approximately 6,000 IT workers.

In the fall of 2001, Ford began converting many of its contract IT positions to full-time jobs under an initiative dubbed Project Renaissance. At that time, the company's IT ranks included approximately 6,800 workers, only about 30 percent of whom were full-time staffers.

By reducing the fees paid to consulting firms for contract workers, Ford expected to reduce its IT costs considerably without significantly cutting the number of workers.

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