Ford Motor Co. is cutting about 3,000 white-collar jobs as it attempts to lower costs and shift from internal combustion to electric vehicles.
Leaders of the Dearborn, Michigan, automaker made the announcement Monday in a companywide email, saying that 2,000 full-time salaried workers would be let go along with another 1,000 contract workers.
The cuts represent about 6% of the 31,000 full-time salaried work force in the U.S. and Canada. Ford’s 56,000 union factory workers are not affected. Some workers also will lose jobs in India.
Executive Chairman Bill Ford and CEO Jim Farley said in the email that Ford will provide benefits and significant help for the workers to find new jobs.
“We have a duty to care for and support those affected – and we will live up to this duty — providing not only benefits but significant help to find new career opportunities,” the email said, according to Automotive News.
They wrote that Ford has a chance to lead in the new era of connected and electric vehicles.
“Building on this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century,” the email said. “It means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new companies.”
Like other automakers, Ford is also facing challenges procuring parts for its vehicles and as inflation pushes up the company’s costs. In August, Ford said it would raise the price of its F-150 Lightning electric pickup truck by thousands of dollars “due to significant material cost increases and other factors.”
The road ahead for electric vehicles
Farley and Ford wrote that they examined each team’s shifting work to decide where cuts would be made. The company determined that its cost structure wasn’t competitive with General Motors, Stellantis and Tesla.
“We are eliminating work, as well as reorganizing and simplifying functions throughout the business,” they wrote in the email.
Farley has said repeatedly that the company has too many employees and needs to trim costs so it can move faster as it transitions to electric vehicles.
“We absolutely have too many people in certain places, no doubt about it. And we have skills that don’t work anymore and we have jobs that need to change,” Farley told investors in July. “We are reshaping our company, like every part of our company.”
In June, Bloomberg reported that Ford could cut as many as 8,000 jobs this year.
The company already has restructured in Europe, Asia and India.