Ford Prepares to Lay Off 8,000 Employees... Cuts Labor Costs to Increase Investment in Electric Vehicles

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Bloomberg reported on the 20th (local time) that Ford Motor Company plans to lay off up to 8,000 employees to secure funds for entering the electric vehicle market.

The news agency cited an anonymous source familiar with the matter, stating that the layoffs are expected to take place in the internal combustion engine vehicle production division called 'Ford Blue.'

This is interpreted as part of Ford CEO Jim Farley's plan to cut costs by $3 billion by 2026. He had said he wants to transform Ford Blue into "the profit and cash engine for the entire company." He also mentioned that workforce reduction is key to increasing profits and emphasized at a conference last February that "there are too many people."

Although the layoff plan has not been finalized, insiders said the layoffs could begin gradually this summer. Ford employs about 31,000 salaried workers in the United States, where most of the reductions are expected to occur.

In March, CEO Farley announced plans to increase spending on the electric vehicle sector to $50 billion and to raise U.S. electric vehicle sales from 27,140 units last year to 2 million units annually by 2026. Last month, Ford's electric vehicle sales surged 76.6% year-over-year, driven by the launch of the F-150 Lightning pickup truck.

However, Ford's stock price has plummeted 39% so far this year through the day before yesterday amid inflation fears and supply chain disruptions.

This content was produced with the assistance of AI translation services.