Ford Cutting Costs By Giving Thousands Of Workers The Axe

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The Blue Oval is looking to reduce expenditure as it heads into the electric era.

Approximately 3,000 Ford employees are expected to lose their jobs in the coming weeks, as the automaker looks to cut costs across the board. The announcement was made on Monday, reports Associated Press, with a companywide email explaining that 2,000 full-time salaried workers and 1,000 contract workers are being let go.

CEO Jim Farley and Executive Chairman Bill Ford noted the company has examined several factors to decide where the changes will be made. "We are eliminating work, as well as reorganizing and simplifying functions throughout the business," reads the email.

The Blue Oval has reportedly examined the company structure and decided where the cuts will take place, noting that Ford's cost structure wasn't competitive when viewed against rivals such as Tesla, General Motors, and Stellantis.


This mass job cuts come as Ford looks to lead the burgeoning electric vehicle segment. Over the coming years, the automaker is expected to reduce its ICE operations and funnel investments into developing new EVs to sit alongside the Mustang Mach-E and F-150 Lightning. "Building on this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century," reads the email. "It means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new companies."

As per Associated Press, this spate of job cuts represents approximately 6% of the company's full-time salaried workforce in the United States and Canada. Some Ford employees in India are also expected to lose their jobs but the company's 56,000 unionized factory workers are not affected.

2021-2022 Ford Mustang Mach-E Front Angle View Ford

While it will make little difference to those faced with unemployment, Ford has promised to provide workers with severance benefits and assistance to find new jobs. This official announcement follows an earlier report that suggested the company would make up to 8,000 roles redundant.

It's possible that more job cuts are on the way, as a spokesperson for the automaker said it's normal for companies to add and remove people from positions as they are needed. "With the fast pace of this industry, we're going to manage the business smartly for these rapidly evolving priorities," said T.R. Reid.

What's more, Ford's CEO has previously stated that the company's 182,000-strong global workforce is too big. It's not just Ford that's looking to reduce costs, though. Tesla recently cut 200 people from its Autopilot department.

2022 Ford F-150 Lightning Front-End View CarBuzz

A little more than two months ago, the Dearborn-based automaker announced it would pour $3.7 billion into producing new electric vehicles, along with the new Mustang and Ranger. Company executives proudly announced the creation of an additional 6,200 jobs through this investment but did not mention the looming job cuts at the time.

Elsewhere, Ford has found itself at the center of a wrongful death case pertaining to a fatal vehicle accident. In 2014, a Georgia couple was killed when their 2002 Ford F-250 rolled over in an accident. The court awarded the plaintiffs, the children of the victims, $1.7 billion. Ford is planning to appeal the verdict.

This verdict, and the announcement of job cuts, saw Ford shares take a tumble on Monday, with shares falling nearly 6%.

Source Credits: Associated Press

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