Electric Vehicle Transition Not Easy... Ford, Still in the Red, Cuts 1,000 More Jobs

Ford Motor Company, which is pushing for a transition to an electric vehicle company, is once again set to lay off around 1,000 employees.

The Wall Street Journal (WSJ) reported on the 27th (local time), citing sources, that Ford plans to lay off at least 1,000 full-time and contract employees, mainly engineers in the North American region.

Ford held an internal meeting the day before and informed some full-time employees that "layoffs will occur soon." The layoffs will focus on engineering positions. The company confirmed that office workers in internal combustion engine vehicles, electric vehicles, and software sectors will also be included. Earlier, WSJ and Bloomberg reported that Ford was expected to announce layoffs this week to cut costs. This report adds the detail that the scale is about 1,000 people as a follow-up. Currently, Ford's North American workforce is estimated to be about 28,000 employees.

[Image source=AP Yonhap News]

Ford, which has committed to investing a total of $50 billion in the transition to electric vehicles by 2026, has carried out several large-scale restructurings over the past year. This is due to expanding deficits caused by pouring massive costs into the electric vehicle transition. Last summer, Ford cut about 3,000 jobs in the U.S., and earlier this year, about 3,800 jobs in Europe. Not only Ford but also competitors such as General Motors (GM) and Stellantis are implementing early retirement and job transfer programs to cover astronomical electric vehicle development costs.

WSJ pointed out that Ford's layoff plan is drawing attention as it comes just weeks before negotiations with the United Auto Workers (UAW). These negotiations concern the working conditions of part-time factory workers for the next four years. Experts have assessed that the new UAW leadership is taking a tough stance, making the risk of strikes higher than ever.

Ford management has long been concerned that it spends $7 to $8 billion more annually compared to competitors. Accordingly, to reduce costs, it is cutting supply chain expenses, streamlining production lineups, and reducing various warranty costs. Following a $2 billion loss last year, the company has also lowered its performance outlook for this year. In particular, a $3 billion loss is expected this year in the electric vehicle business sector, which Ford is focusing on.

Meanwhile, following the layoff news, Ford Motor Company's stock was trading about 2% higher than the previous close in the New York Stock Exchange that afternoon.

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