In an effort to fund its plans to produce EVs, Ford apparently plans to cut up to 8,000 jobs in the coming weeks, Bloomberg reported.
The company’s Ford Blue unit, which was recently established to develop internal combustion engine (ICE) vehicles, will be affected, along with other salaried positions.
It is also reported that the majority of the cuts are expected to take place in the United States.
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COLMA, CALIFORNI – JANUARY 05: The Ford Bronco logo is displayed on a vehicle at Serramonte Ford on January 5, 2022 in Colma, California. Ford announced a 17 percent decline in year-over-year sales in December. Truck sales fell more than 15 percent, while SUV sales fell 11 percent
Make way for EVs
Ford CEO Jim Farley reorganized the company in March by splitting it into the Ford Blue and Model E divisions, the latter focusing on electric vehicles such as the Mach E and F150 Lightning. To make Ford Blue the company’s primary source of revenue and profit, he also announced plans to cut spending by $3 billion by 2026.
According to the sources, the job losses are expected to affect Ford’s salaried ranks in a range of operational positions. They may be coming in phases, but Bloomberg sources predicted they’d start this summer.
It’s worth noting that about 31,000 salaried Ford employees work in the US, where the bulk of the layoffs are expected.
To ensure the company is lean and fully competitive with the best in the market, Ford has set specific targets to reduce its cost structure, Chief Communications Officer Mark Truby said in a statement with Bloomberg.
Also read: Ford launches ‘Model E’ EV division, separated from its ICE gas cars under Ford Blue until phased out
Key to increasing profit
Farley claims reducing workers is the key to increasing revenue, which has disappeared on its electric Mustang Mach-E and other plug-in models due to escalating components and warranty costs.
At a Wolfe Research car conference in February, Farley stated that the company has an excessive number of employees and that its management team believes that its “ICE and BEV portfolios are under-earned.”
Farley added that he wants the company’s existing gas-powered vehicles to generate more revenue to fund Ford’s electric EV plans.
According to Bloomberg, Ford shares are down 39 percent this year through Tuesday, worse than the overall market as supply chain problems and inflation concerns have shaken the auto industry.
The automaker announced plans to increase spending on electric vehicles to $50 billion and to produce two million EVs by 2026. The company sold just 27,140 EVs domestically last year, but last month, when the F-150 Lightning began shipping, sales jumped significantly by 76.6%.
Related article: Ford Mustang Mach-E will produce 200,000 units per year by 2022 due to ‘incredible demand’ like F-150 Lightning
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Written by Joaquin Victor Tacla
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