Ford Motor Co. announced plans to cut 3,000 jobs as the automaker restructures and reorients its business around electric vehicles, a spokesman confirmed Monday.
The layoffs, first reported by the Wall Street Journal, will affect about 2,000 salaried and about 1,000 contract employees in the United States, Canada and India.
The company announced the move in an internal email Monday, confirming reports from several media outlets last month that thousands of job cuts were looming as the company worked to shave costs and as it transitioned toward EV production.
The company is “not as cost effective as we need to be,” according to Ford spokesman T.R. Reid.
“Priorities of the business are changing and expanding to include EVs, which will be predominant over time, and we’re reinventing the business in terms of how we do things,” he told the Post.
“These are real people being affected by these actions,” Reid added. “It’s not lost on folks that even changes that are necessary effect real people and we don’t take that lightly.”
The announcement comes about a month after Ford released healthy second-quarter earnings, beating Wall Street’s expectations as its adjusted operating income tripled year-over-year to $3.7 billion. U.S. sales also jumped nearly 2%.
Chief Executive Jim Farley said he was focused on pushing aggressively toward growing its electric vehicle business while “improving profitability.”
“We’re moving with purpose and speed into the most promising period for growth in Ford’s history – to innovate and deliver great products and connected services, raise quality and lower costs,” Farley said in a news release.
Going forward, Ford plans to release reports for three separate business units: Ford Blue, the traditional models; Ford Model e, the EV division; and Ford Pro, focusing on its commercial and government customers.
A week before the earnings call, Ford executives announced plans to manufacture 600,000 electric vehicles globally by late 2023 and confirmed that they secured 100% of the battery supplies needed to make those cars.
The company said it is on track to make more than 2 million electric vehicles by the end of 2026, having already sourced 70% of the battery capacity needed to meet that goal.
Ford’s effort to lean into electric vehicles is in line with the Biden administration’s climate initiatives.
Last week, the president signed the Inflation Reduction Act into law, which includes new tax credits for electric vehicles that will ultimately make climate-friendly cars more affordable.
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