Ford is looking to make major cuts to its workforce in the midst of a shift to electric vehicles. According to a recent report in BloombergBlue Oval is preparing to lay off 8,000 wage workers — about a quarter of its U.S. workforce — as it aims to cut operating costs by $3 billion by 2026.
The cuts will come from Ford Blue, the company’s old internal combustion engine company. Earlier this year, Ford divided itself into two entities, with Ford Blue covering ICE vehicles and a Ford Model E focused on electric vehicles and software projects. At the time, Ford said Ford Blue would generate revenue that would help drive the Ford Model E to develop new, innovative products.
But now, it looks like Ford Blue will have to generate that revenue with much fewer employees. cuts that Bloomberg The reports are not finalized and could change, and are likely to come in phases, beginning as early as this summer. Ford employs about 31,000 workers in the United States, where the bulk of the cuts are expected to fall.
according to Detroit Free PressAnd the Ford CEO Jim Farley sent a video message to employees Thursday morning, in which he did not deny that layoffs had occurred and reiterated the goal of lowering operating costs at the company.
TR Reid, Ford’s director of corporate communications and public policy, declined to discuss what he called “speculation by others about our business.”
Reed said in an email to the edge. “We are reshaping what is happening across all of our Automotive business units and the entire company. And we have set clear goals to improve our cost structure along the way, so we are lean and fully competing with the best in the industry.”
Ford has said it intends to spend $50 billion on its transition to electric vehicles. When he announced the restructuring, Farley said the Ford Blue should be “a profit and cash engine for the entire organization.”
But profits have been hard to come by amid a broad turnaround in the auto industry. Ford lost $3.1 billion in the first quarter of 2022, mostly due to a sharp decline in the value of its stake in EV Rivian. The company’s operating profit was $2.3 billion, down from $3.9 billion in the first quarter of 2021.
Ford said employee cuts are key to increasing profits. Thanks to rising material costs, its best-selling cars, such as the Ford Mustang Mach-E, are struggling to meet their profit margins. The company said it was rapidly re-engineering its vehicles to improve profits, including introducing cheaper battery chemicals to manufacture.
By late 2023, the company said, it plans to have enough battery supplies to be able to support production of 270,000 Mach-S Mustangs, 150,000 Transit EVs, 150,000 F-150 Lightnings, and 30,000 units of the Mid-Obvity. The all-new size. SUV destined for release in Europe.