Ford Motor Co.
confirmed on Monday that it is laying off about 3,000 employees and contract workers, marking the latest in its efforts to cut costs as it makes a transition to longer-range electric vehicles.
Ford sent an internal email Monday to employees, saying it would begin notifying affected salaried and agency workers this week of the cuts. The email was seen by the Wall Street Journal.
The 1% reduction in Ford’s workforce of about 183,000 is mainly aimed at workers in the US, Canada and India. About 2,000 of the targeted cuts will be salaried jobs at the Dearborn, Mich., automaker. The remaining 1,000 employees work in contract positions with outside agencies, the company said.
The cuts were not unexpected. The Wall Street Journal and other media reported in July that layoffs were coming for white-collar staff as part of a broader restructuring to sharpen the auto company’s focus on electric vehicles and the batteries that power them.
Ford shares closed down 3.9% each on Monday after news of a $1.7 billion jury verdict in a case involving a rollover accident involving one of the company’s F-250 trucks that left two dead.
The company’s email, signed by executive chairman Bill Ford and CEO Jim Farley, said Ford is changing the way it operates and reallocating resources as it embraces new technologies that were not previously core to its business, such as developing advanced software for her vehicles. The job cuts are effective Sept. 1, a spokesman said.
“Building that future requires changing and reshaping almost every aspect of how we’ve operated for more than a century,” the internal message said.
Mr. Farley recently said that Ford has too many employees and that the existing workforce lacks the expertise needed to transition to a portfolio of electric vehicles with software.
It has said it plans to cut $3 billion in annual costs by 2026 as part of its goal to reach a 10 percent pretax profit margin by then, down from 7.3 percent last year.
Like many global automakers, Ford is pouring money into electric vehicles in a bid to close the sales gap with Tesla Inc.
The company has said it will spend about $50 billion by 2026 to develop electric vehicles, targeting global sales of two million by then.
Mr. Farley earlier this year split the company into separate divisions, including one to focus on electric vehicles and advanced technologies and another to handle traditional internal combustion vehicle lines.
It said profits from its range of petrol and diesel vehicles would help fund the transition, but that part of the business needed to run more efficiently.
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It appeared in the August 23, 2022 print edition as “Ford Cuts 3,000 White-Collar Jobs”.