Ford CEO Jim Farley announces a new $3.5 billion electric vehicle battery plant in the state to manufacture lithium iron phosphate batteries at the automaker’s battery lab in suburban Detroit on February 13, 2023.
Michael Wayland/CNBC
DETROIT – Ford engine confirmed on Monday it will implement layoffs this week, mostly affecting engineering jobs in the US and Canada, as the automaker seeks billions of dollars in cost-cutting measures as it restructures its operations.
The job cuts are expected to affect all three of Ford’s businesses: Ford Blue, the traditional internal combustion engine business; Model e, its electric vehicle unit; and Ford Pro, its fleet service operation.
A company spokesman would not say how many employees would be affected. In Ford’s most recent quarterly filing in May, the automaker said it expects total charges of $1.5 billion to $2 billion in 2023, “primarily attributed to employee layoffs and supplier severance payments.”
This forecast compares to $2 billion and $608 million in 2021 and 2022, respectively, related to similar measures.
Ford has been restructuring its operations as part of its Ford+ plan for several years, led by CEO Jim Farley. The automaker cut 3,000 jobs in North America in August and most recently made 3,800 layoffs in Europe.
“We continue to review our global businesses and may take additional restructuring actions if a path to sustained profitability is not feasible given the capital allocation required for those businesses,” Ford said in its first-quarter filing.
Farley said the company has a cost disadvantage of about $7 billion compared to some of its peers, which it is trying to address through efficiencies and job cuts.
According to a separate public filing, Ford’s global workforce fell by about 10,000 to 173,000 last year.
“Executing our Ford+ plan for growth and value involves increasing quality, reducing costs, investing in our priorities and matching staffing levels with the skills we need,” the company said in an email Explanation. “Those affected by the changes will be offered severance pay, benefits and significant help in finding new career opportunities.”
The latest layoffs were first reported late last week. At this point, some contractors were told they would no longer be working with the company.
Executives whose teams have been affected were notified this afternoon and employees are expected to be notified by mid-week, according to people familiar with the company’s plans. The company has instructed units affected by the cuts to work remotely during the layoffs this week, the people confirmed.
Ford isn’t the only automaker cutting its headcount as it rebalances its business and focuses more on electric vehicles.
Crosstown rival General Motors took some layoffs and implemented an employee buyout program that cost the company $875 million in the first quarter.
jeep manufacturer Stellar confirmed in April that it is offering around 33,500 US employees voluntary placements as the global automaker seeks to cut costs and headcount.
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