Ford Motor Company
confirmed on Monday that it is laying off some 3,000 white-collar employees and contractors, marking the latest in its efforts to cut costs as it makes a far-reaching transition to electric vehicles.
Ford sent an internal email on Monday to employees, saying it would begin notifying affected salaried and temporary workers this week about the cuts. The email was reviewed by The Wall Street Journal.
The workforce reduction primarily targets employees in the US, Canada and India. About 2,000 of the targeted cuts will be salaried jobs at automaker Dearborn, Michigan. The remaining 1,000 employees are working in contracted positions with outside agencies, the company said.
The cuts were not unexpected. The Wall Street Journal and other media outlets reported in July that layoffs were coming for white-collar employees as part of a broader restructuring to sharpen the automaker’s focus on electric vehicles and the batteries that power them.
Ford shares tumbled nearly 5% in Monday’s midday trading session after news of a $1.7 billion jury verdict in a case involving an F-250 truck rollover accident that left two dead people.
The company’s email, signed by Chief Executive Bill Ford and Chief Executive Jim Farley, said Ford is changing the way it operates and reallocating resources as it adopts new technologies that were previously not essential to its operations, such as the development of advanced software for their vehicles. . The job cuts will take effect on September 1, a spokesperson said.
“Building that future requires changing and reshaping virtually every aspect of the way we’ve operated for over a century,” read the internal message.
Mr. Farley recently said that Ford has too many employees and that the existing workforce lacks the expertise to transition to a software-laden electric vehicle portfolio.
He said he intends to cut $3 billion in annual costs by 2026 as part of his goal of achieving a pre-tax profit margin of 10% by then, up from 7.3% last year.
Like many global automakers, Ford is pouring money into EVs in an effort to close the sales gap with Tesla. Inc.
The company said it would spend about $50 billion by 2026 to develop electrical products, targeting global sales of two million by then.
Earlier this year, Farley split the company into separate divisions, including one to focus on EVs and advanced technologies, and another to handle its traditional lines of internal combustion vehicles.
He said profits from its line of gasoline and diesel vehicles will help finance the transition, but that part of the business must operate more efficiently.
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