Ford Motor Co. implemented another round of personnel cuts, starting Monday. The details haven’t been released, but reportedly the company is laying off hundreds of salaried workers, mostly engineers, as it seeks to right-size the automaker.
The company cut 3,000 workers earlier last fall and nearly 4,000 in Europe prior to that.
“These actions are related to the Ford+ growth plan we introduced in 2021 and have been increasingly implementing over the past year,” said T.R. Reid, Ford spokesman, in a statement emailed to TheDetroitBureau.com.
“Delivering on the plan includes adjusting staffing to match focused priorities and ambitions, while raising quality and lowering costs. What we’re doing this week in the U.S. and Canada mostly, but not only, related to engineering roles. People affected by the changes will be offered severance pay, benefits and significant help to find new career opportunities.”
The company didn’t release a final number affected, but it’s expected to be less than 1,000. Ford employs about 28,000 salaried workers in the U.S.
The plan
The company’s plan, dubbed Ford+, aimed to make the company leaner and more profitable. Among the goals put forth is to have a profit margin above 10% by 2026. That includes a margin of better than 8% for the company’s burgeoning EV business.
However, the company is expected to report a loss of $3 billion on its Ford Model e unit for 2023. Ford CEO Jim Farley explained earlier the company was essentially using the profits from its internal combustion-based unit, Ford Blue, to fund the development of Model 3.
Officials said earlier this year Ford faces a $7 billion cost disadvantage to its competitors, so big decisions need to be made.
“We’re not cost competitive,” Reid said in a Bloomberg interview. “We have specific priorities and ambitions that have implications for skills, assignments and staffing needs. These changes are consistent with that. They’ll make us cost effective.”
Change is in the wind
Farley has repeatedly said publicly that the ongoing shift within the company will require realigning talent. Some longtime Ford employees, for example, moved over to the EV business unit alongside a score of new hires from Silicon Valley.
There was talk that the company could cut as many as 8,000 jobs at one point when Jim Hackett was CEO. Critics felt like Hackett was moving too slowly to transform the company. When Farley took over in October 2020, one of his first pledges was to accelerate the pace of change within the company.
Perhaps just as notably, Ford isn’t the only Detroit automaker making these types of cuts. GM’s been cutting jobs too, getting about 5,000 with buyouts earlier this year than cutting another 500 white collar jobs too.1w1