Goodyear job cuts: Unanswered questions in the UK and EMEA tyre markets

Goodyear’s decision to cut 5 per cent of its global salaried employees is shocking enough for the firm’s 72,000-strong worldwide workforce. However, the fact that senior executives directly linked that decision to the company’s worse-than-expected performance in the EMEA region (Europe Middle East and Africa) is giving employees in those countries extra cause for concern.

In order to gain clarity on how the job cuts are affecting workers across the EMEA region, Tyres & Accessories asked company representatives in both the UK and EMEA if they could confirm how many jobs would be lost both across EMEA and in the key UK, German and Italian markets. Recent news that German unions have been asking for significant pay increases certainly don’t track with cost-cutting measures.

Specifically, we wanted to know if the global figures of 5 per cent of the salaried workforce and 500 job cuts is spread evenly across the globe. Indeed, it is conceivable that EMEA market employees would be concerned that they are facing a job cut rate of greater than five per cent in light of the link made by senior executives in Akron. Likewise, within EMEA are jobs being cut at the same rate across key markets such as the UK, Germany and Italy?

However, Goodyear representatives “do not have any information available that would answer these questions”. Rather they offered an edited version of the original Akron “cost savings actions” statement, which read:

“On 27 January, the Goodyear Tire & Rubber Company announced cost savings actions in response to a challenging industry environment and cost pressure driven by inflation.

“Rationalization and workforce reorganization will result in an approximately 5 per cent reduction in salaried staff globally, or about 500 positions, with a portion in international businesses still subject to required consultation with relevant stakeholders.”

The reason for the current lack of detail is because the rationalisation actions are being framed as the start of a very long process. However, the fact that Akron-based executives have already budgeted $55 million for “cash severance payments” suggests they already have fairly significant insight into what the rationalisation actions will mean on the ground.

One more unanswered question relates to the number of job losses that will take place. Goodyear’s official release points to the loss of 5 per cent of the global salaried workforce “or about 500 positions”. However, Goodyear’s press releases regularly report that the company “employs about 72,000 people”. Of course, the 72,000-strong figure will include hourly and agency workers, but the fact that 5 per cent of 72,000 is actually 3600 will not be a reassuring calculation for workers.

However, Goodyear representatives clarified: “Our total global workforce includes approximately 10,000 salaried positions, five per cent of which is 500”, adding:

“Some of the associates that would be affected by the restructuring announced on Friday – such as those in our Akron headquarters – have already been informed.

“Outside the US, we are following processes that take into account relevant stakeholder consultations, as required.”

Tyres & Accessories has requested a definition of Goodyear’s usage of the term “salaried staff”. UK union representatives couldn’t offer any further detail either. Without that insight, and due to Goodyear’s decision to link the cuts with EMEA’s recent financial performance, it is reasonable to conclude that Goodyear’s EMEA businesses could face job cuts at a rate greater than the headline 5 per cent figure.

*Comment detailing the approximate size of Goodyear’s salaried workforce added subsequent to publication.