As American companies pivot towards EVs, they are making sweeping changes across the board. The Ford job cuts are the latest development announced by the multinational automaker. Salaried and contract workers across North America and India will be affected by the Ford layoffs in the coming days.
Nearly 3,000 employees are expected to be let go as part of the Ford Motor Company job cuts. The company wants to reduce costs and simplify processes as it transitions towards a Ford EV future.
Ford Motor Company Job Cuts
In an email on August 22, the automaker revealed that the Ford job cuts will impact 2,000 full-time salaried workers and 1,000 contract workers. Executive Chairman Bill Ford and CEO Jim Farley assured that the employees affected by Ford layoffs will be given severance pay and assistance in finding new jobs.
Farley mentioned that the current workforce of 182,000 is too large and that the company must downsize to cut costs as it moves towards building a fleet of electric vehicles. The CEO has previously stated the automaker does not have enough workers with the required skill set as it accelerates its plans for Ford EVs.
“We are eliminating work, as well as reorganizing and simplifying functions throughout the business. You will hear more specifics from the leaders of your area of the business later this week,” Farley and Ford wrote in the joint email. They also communicated that the company’s cost structure “is uncompetitive versus traditional and new competitors.” The new competitors on the block are General Motors, Stellantis, and Tesla, all of whom have taken great strides in developing their fleet of EVs.
The Ford restricting might continue over the year, as a company spokesperson stated that as the company continues to change to keep up with industry trends we might see more Ford layoffs on the horizon. Earlier, the automaker had said that it plans to spend approximately $50 billion to produce Ford EVs by 2026.
The Billion Dollar Ford EV Plan
Rising prices for batteries, raw materials, and supply chain issues have put added pressure on automakers across the globe. However, Ford is currently attempting to achieve its full-year profit forecast, despite inflation raising costs by nearly $3 billion.
In May of last year, Farley had introduced the Ford+ plan, designed to drive business growth and position Ford to outperform legacy automakers and EV competitors. At the time Bill Ford had reiterated the company’s commitment to giving customers the very best Ford has to offer while making a difference in the health of the planet.
The Ford job cuts are just one of the many changes the automaker will make on its way to achieve carbon neutrality by 2050. It has also pledged to use 100% local, renewable electricity in all its manufacturing operations by 2035. In 2022, the carmaker is expected to spend around $5 billion on Ford EVs, a two-fold increase in comparison to 2021.
Doug Field, Chief Officer, EVs and Digital Systems at Ford, last year said, “Designing truly incredible electric and software-driven vehicles – with experiences customers can’t even imagine yet – requires a clean-sheet approach. We are creating an organization that benefits from all of Ford’s know-how and capabilities, but that can move with speed and unconstrained ambition to create revolutionary new products.”
By 2026, the company has plans to produce nearly two million Ford EVs annually, almost one-third of the automaker’s total volume and hopes to raise it to half by 2030. It wants to capture greater market share in segments where it already leads and hopes to achieve this by developing key technologies and efficient EVs.
