A new wave of layoffs is anticipated at Ford Motor Company, primarily targeting employees in engineering roles in the United States and Canada. The job cuts, which are part of the company’s ongoing cost-cutting efforts, were confirmed by leaders of the affected teams on Monday, according to CNBC News. Employees are expected to be notified of the layoffs over the next few days.
Ford has not disclosed the exact number of employees who will be affected by the layoffs. However, the roles are expected to be eliminated across all three of Ford’s business units – Ford Blue, Ford Pro, and Model e. Ford Blue focuses on vehicles with traditional combustion engines, Ford Pro handles commercial vehicle services and distribution, and Model e focuses on electric vehicles.
These job cuts are related to Ford’s Ford Plus growth plan, announced in 2021. The plan aims to restructure the company and reduce costs, according to T.R. Reid, Corporate & Public Policy Communications for Ford Motor. In an email to The Verge, Reid stated that the layoffs are part of adjusting staffing to match the company’s priorities and ambitions while improving quality and lowering costs.
Employees affected by the layoffs will be offered severance pay, benefits, and significant assistance in finding new career opportunities, according to Reid. The company is committed to supporting its employees during this transition.
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Ford’s CEO, Jim Farley, acknowledged in February the company’s cost disadvantage compared to its competitors, stating that Ford has an annual cost disadvantage of $7 billion to $8 billion. Farley emphasized that the company is willing to make necessary cuts to reduce expenses related to these overheads by “mid-decade.”
In its first-quarterly earnings report for this year, Ford estimated that it would incur charges between $1.5 billion and $2 billion in 2023, primarily for employee separations and supplier settlements, as mentioned in its SEC filing.
This is not the first instance of job cuts associated with Ford’s restructuring plans. In July 2022, 8,000 roles were eliminated from the Ford Blue business arm to enhance competitiveness within the industry. Further, in August 2022, 3,000 employees and contract workers across the US, Canada, and India were laid off. Additionally, in February of this year, the company laid off an additional 3,800 employees in Europe as part of its shift towards electric vehicle production.
Ford’s restructuring efforts and cost-cutting measures demonstrate the company’s commitment to align with the changing landscape of the automotive industry. As the demand for electric vehicles continues to grow, Ford aims to streamline its operations and make strategic adjustments to maintain its competitiveness and financial stability.
While these layoffs may be difficult for the employees involved, Ford is dedicated to providing support and assistance to help them navigate through this challenging period. By offering severance pay, benefits, and help with finding new career opportunities, the company aims to mitigate the impact on the affected individuals and ensure a smooth transition for them.
Overall, these layoffs are part of Ford’s broader strategy to optimize its operations, reduce costs, and position itself for long-term success in the evolving automotive market. As the company continues its transformation, it remains committed to its employees and their well-being during this transition.
