Ford is going to lay off at least 1,000 employees, mostly engineers
Ford plans to lay off at least 1,000 employees and contract workers in its latest effort to alleviate some of the high cost of EV investments.
The planned job cuts will target the company’s tech ranks, a company spokesman said confirmed to the Wall Street Journal.
The layoffs will be the latest step in Ford’s budget cuts, following several rounds of global layoffs this year, including a downsizing of 3,000 workers in the US last summer.
Ford, along with other automakers, has invested heavily in electric vehicles (EVs) in recent years, aiming to invest more than billion by 2026.
The company plans to produce 600,000 electric vehicles per year by the end of this year and 2 million per year by 2026.
Ford CEO Jim Farley suggested the cuts were due to the company’s workforce not having the right skills to move more toward clean energy (Photo: Farley at the Amerex Technology summit in February)
Ford, along with other automakers, has invested heavily in electric vehicles (EVs) in recent years (Photo: Ford all-electric Mustang Mach-E)
The company says it expects to lose $3 billion in operating profit on its EV business this year.
“The teams affected were convened yesterday to let them know that action will be taken this week,” said Ford spokesman TR Reid.
“Then individual people will be notified today and tomorrow,” they added.
Shares of the company appeared to be doing well, up 2.37 percent on Tuesday and up more than 14 percent last month.
Ford CEO Jim Farley also suggested that the cuts were due to the company’s workforce not having the right skills for the clean energy transition, and that the company is adapting.
“It’s more real-time and not big giant events,” he said, adding that the company is hiring in some areas, such as software development.
In addition to internal cost savings, Ford has sought government funding to expand its battery manufacturing business.
The U.S. energy department confirmed last week it would loan a Ford joint venture $9.2 billion to expand production at its plants in Kentucky and Tennessee.
News of the job cuts comes just weeks before Ford begins negotiations with the United Auto Workers (UAW) union
Ford’s planned job cuts will target the company’s engineering ranks
Ford’s stock seemed to be doing well, up more than 14 percent over the past month
News of the job cuts comes just weeks before the company is set to begin negotiations with the United Auto Workers (UAW) union on a new one-year contract for its hourly factory workers.
There is a greater than normal risk of strikes, analysts have suggestedafter electing a tough new leadership team.
UAW President Shawn Fain, who was elected in March, has criticized the federal loan, suggesting it does not really benefit the company’s workforce.
“These companies are extremely profitable and will continue to make money whether they sell combustion engines or electric cars. Yet the workers are getting a smaller and smaller piece of the pie,” he said.
Company officials said the electric vehicle unit, dubbed Ford Model e, will be profitable before tax with an 8% pre-tax profit margin by the end of 2026.
Other companies also announced brutal job cuts this week, including KPMG, which says they will cut 5 percent of the US workforce.
A spokesman for the accounting firm said on Monday that the decision was in response to “economic headwinds coupled with historically low turnover.
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It comes after the Big Four firm already cut about 2 percent of its U.S. workforce in February.
“We are not taking this decision lightly.
However, we believe this is in the best long-term interest of our company and will position us for continued success going forward,” KPMG said in an emailed statement.