Ford CEO Jim Farley at a battery lab for the automaker in suburban Detroit announcing a new $3.5 billion electric vehicle battery plant in the state to produce lithium iron phosphate batteries, Feb. 13, 2023.
Michael Wayland/CNBC
DETROIT — Ford engine confirmed on Monday that it will implement layoffs this week, which will mostly affect tech jobs in the US and Canada as the automaker seeks billions in cost-cutting measures as it restructures its business.
The job cuts are expected to affect all three of Ford’s business units: Ford Blue, its traditional internal combustion engine business; Model e, its electric vehicle unit; and Ford Pro, its fleet servicing business.
A spokesman for the company declined to say how many employees are affected. In Ford’s most recent quarterly filing in May, the automaker said it expected to incur total costs ranging between $1.5 billion and $2 billion by 2023, “primarily attributable to employee segregation and supplier settlements.”
That forecast, compared to $2 billion and $608 million in 2021 and 2022, respectively, covered similar actions.
Ford has been restructuring its operations for several years under its Ford+ plan, led by CEO Jim Farley. The automaker cut 3,000 workers in North America in August and more recently made 3,800 layoffs in Europe.
“We continue to evaluate our global operations and may take additional restructuring actions if a path to sustainable profitability is not feasible when looking at the capital allocation needed for those businesses,” Ford said. said in the first quarter filing.
Farley has said the company has a cost disadvantage of about $7 billion compared to some of its competitors, which it is trying to address through efficiencies and job cuts.
Ford’s workforce fell by about 10,000 to 173,000 worldwide last year, according to a separate public filing.
“Delivering on our Ford+ plan for growth and value creation involves increasing quality, reducing costs, investing in our priorities and aligning the workforce with the capabilities we need,” the company said in a statement. statement by email. “People affected by the changes will receive severance pay, benefits and significant assistance in finding new career opportunities.”
The most recent layoffs were first reported late last week. At that point, some of the contractors were told they would no longer be working with the company.
Leaders whose teams were affected were notified this afternoon and workers are expected to be notified mid-week, according to people familiar with the company’s plans. The company has instructed units affected by the cuts to work remotely this week while the layoffs are carried out, the people confirmed.
Ford isn’t the only automaker to cut its workforce as it refocuses its business to focus more on electric vehicles.
Crosstown rival General engines has taken some layoffs and implemented an employee buyout program that cost it $875 million in the first quarter.
Jeep maker Stellantis confirmed in April that it was offering voluntary takeovers to about 33,500 U.S. employees as the global automaker seeks to cut costs and cut headcount.