Ford To Cut 3,000 Jobs to Lower Costs, Prepare for EV Transition

The cuts will be made to white-collar roles, including members of Ford’s internal combustion engineering team.

byLewin Day| PUBLISHED Aug 22, 2022 6:29 PM
Ford To Cut 3,000 Jobs to Lower Costs, Prepare for EV Transition
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Ford has announced that it will soon shed 3,000 jobs as it reconfigures for the transition towards electric vehicles, reports Fortune.

The news comes from a company-wide email sent out by Ford leadership on Monday. It outlines that Ford plans to cut 2,000 full-time positions, along with a further 1,000 contract positions. Ford CEO Jim Farley noted that workers will be given benefits and assistance to find new jobs outside the company.

Ford's full-time salaried workforce in the US and Canada stands at approximately 31,000 workers at present, with the planned cuts reducing that by around 6%. The positions to be cut are primarily white-collar roles, and the move will not affect Ford's 56,000-strong unionized factory workforce. Some jobs will also be cut in Ford's Indian operations.

It's all part of Ford's push to reconfigure itself for the coming age of electric vehicles. The company's own assessment showed its cost structure to be uncompetitive with rivals like Tesla, GM, and Stellantis. The jobs cuts are part of Ford's efforts to close that gap.

Ford made moves earlier this year to streamline operations, splitting its business into separate divisions for EV and ICE-powered vehicles. Ford

"We are eliminating work, as well as reorganizing and simplifying functions throughout the business," the email read. According to a Ford spokesperson, jobs will be cut in all areas of the company, including the internal combustion engineering group.

The cuts should come as little surprise to those following the company. Farley noted that Ford had "too many people" as recently as July, and these cuts look to be a way of addressing that excess.

Farley has also espoused the view that Ford has excessive variants in its range of internal-combustion vehicles, hurting profits with excess costs. Moving forward, the company hopes to build many vehicles from a more unified EV platform. This would then free up money for investments in better software, displays, and self-driving systems.

Other moves towards optimization have seen Ford split its business into three distinct units. In March, the company announced it would establish the Ford Model e division to handle electric vehicles, while traditional ICE-powered vehicles would be handled by Ford Blue. Fleet and commercial sales would then fall under the Ford Pro division.

Running a successful car company isn't just about building great vehicles or hardcore engineering. It's also about wrangling with tough decisions to keep billion-dollar businesses afloat and the factories humming. Unfortunately, sometimes that means making tough decisions that affect real people, or in this case, 3,000 of them.

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