Ford Will Lay Off 8,000 Workers To Make Way For Funding EV Projects

In an effort to finance its plans to produce EVs, Ford is apparently planning to eliminate up to 8,000 jobs over the next few weeks, according to Bloomberg.

The company's Ford Blue unit, which was recently established to develop vehicles using internal combustion engines (ICE), will be affected, along with other salaried roles.

It is also reported that the majority of the cuts are anticipated to take place in the United States.

Make Way For EVs

Jim Farley, the CEO of Ford, reorganized the business in March by splitting it into the Ford Blue and Model E divisions, with the latter focusing on electric vehicles such as the Mach E and F150 Lightning. In order to make Ford Blue the company's main source of revenue and profit, he also disclosed plans to reduce spending by $3 billion by 2026.

According to the sources, the job cuts are anticipated to affect Ford's paid ranks across a range of operational roles. They might appear in stages, but Bloomberg's sources predicted that they would start this summer.

It is worth noting that about 31,000 paid Ford employees work in the US, where the majority of the job layoffs are anticipated.

In order to ensure that the company is lean and completely competitive with the finest in the market, Ford has set out specific goals to reduce its cost structure, according to Chief Communications Officer Mark Truby in a statement with Bloomberg.

Key To Increasing Earnings

Farley claims that reducing employees is the key to increasing earnings, which have vanished on its electric Mustang Mach-E and other plug-in models as a result of escalating components and warranty costs.

At a Wolfe Research car conference in February, Farley stated that the company has an excessive number of employees and that the management team believes that the "ICE and BEV portfolios are under-earning."

Farley added that he wants the company's existing gas-powered vehicles to generate more revenue to fund Ford's electric EV plans.

According to Bloomberg, Ford's shares have fallen 39 percent this year through Tuesday, worse than the overall market, as supply-chain problems and concerns about inflation have shaken the car industry.

The car manufacturer announced plans to increase spending on electric vehicles to $50 billion and to produce two million EVs by 2026. The firm only sold 27,140 EVs domestically last year, but last month, as the F-150 Lightning began shipping, sales increased significantly by 76.6%.

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Written by Joaquin Victor Tacla