Ford to axe 3,000 workers as it ‘reshapes’ operations for new era of electric cars

Ford Motor plans to shed 3,000 employees and contract workers, citing a need to reshape its labour force as it invests tens of billions of dollars to make electric vehicles.

The company plans to cut 2,000 salaried employees and terminate another 1,000 contract workers, according to an internal memo on Monday from chief executive Jim Farley and executive chair Bill Ford. The cuts, while spread across the US, Canada and India, will be concentrated around the carmaker’s headquarters in south-east Michigan.

The executives called Ford’s cost structure “uncompetitive” compared to other carmakers, both legacy producers of and upstarts in the fast-growing EV market.

“We have an opportunity to lead this exciting new era of connected and electric vehicles,” their memo said. “Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century . . . And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure.”

Ford in March split operations into separate businesses, with one focusing on internal combustion engines and another on EVs. The company had 183,000 employees at the end of 2021, down from 186,000 at the end of 2020.

The company said it still expects its internal combustion engine business to grow. But Farley has said Ford’s workforce needs to change, noting in July that “we have skills that don’t work anymore” as the carmaker orientates itself around electric vehicles.

Ford’s US group plans to derive one-third of overall sales from EVs by 2026, rising to half by the end of the decade. In Europe, where there were extensive cuts under the previous chief executive, the company has committed to making all passenger cars electric by 2030.

Ford in June warned of “significant” staffing cuts, even as it chose a plant in Spain to make electric cars.

The same month, the company said it would add more than 6,200 union manufacturing jobs throughout the US Midwest as the company expanded its electric vehicle production capacity, while also converting 3,000 temporary positions to permanent full-time positions.

The carmaker also committed in March to spending $50bn by 2026 as it boosts its EV business, building factories and hiring more software and electrical engineers. It is an increase from the original $30bn it pledged.

The company is investing billions to build or upgrade assembly and battery plants in Tennessee, Kentucky and across the Midwest.