Published - August 23, 2022 @ 2:19 PM (EET)
Ford Motor Co. (NYSE:F) confirmed Monday it is cutting roughly 3,000 white-collar and contract jobs in its latest efforts to reduce costs and fund its $50 billion transition to electric vehicles.
While the automaker will also eliminate positions in Canada and India, most cuts will be in the US, said a company spokesperson. In an internal letter sent to employees, Ford said it would begin notifying the affected 2,000 salaried and 1,000 agency workers this week. The job cuts will take effect on 1 September 2022.
The layoffs weren't unexpected, however. For months, Ford Chief Executive Jim Farley has said that he believed the company had too many people and that not enough of its workforce had the skills required to sharpen its focus on electric vehicles and the batteries that power them.
Earlier in July, Farley said "cost reduction would happen" in the combustion operations. But on Monday, Ford said the staff cuts would affect the entire company. In addition, Ford's spokesperson didn't rule out additional jobs cuts, while Bloomberg previously reported Ford is considering eliminating as many as 8,000 jobs.
NOW WHAT
Though Ford has been improving profitability drastically since 2019, the automaker plans to produce 600,000 electric vehicles annually by late 2023 and over 2 million units by 2026.
For this reason, the company is making quick, aggressive moves to free up cash.
In the company's email Monday, Farley said Ford is changing the way it operates and redeploying resources as it embraces technologies that weren't previously at the center of operations, such as advanced software development.
Signed by Executive Chair Bill Ford and Fairly, the internal email read,
"Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century."
Elsewhere on Friday, a Georgia jury awarded $1.7 billion in compensation to the family of a couple killed in a 2014 accident involving a Ford F-250 pickup truck.
Markets responded to the news in addition to the job-cuts Monday, sending shares down 3.9%.
