Ford Motors to lay off 8,000 staff to fund its electric-vehicle venture

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Ford Motor Company is reportedly preparing to cut about 8,000 jobs in the upcoming weeks as the company is trying to increase income to fund its venture into the electric vehicle (EV) market.

The layoffs are estimated to affect other salaried operations across the company as well as the recently established Ford Blue unit, which oversees the development of internal combustion engine vehicles. Moreover, details of the strategy have not yet been finalized and may potentially alter.

The Chief Executive Officer at Ford Motors Jim Farley has made a significant decision to reduce expenditures by USD 3 billion by 2026, in addition to making Ford Blue the profit and cash engine for the entire enterprise.

Mr. Farley added that to restructure Ford by dividing the company's auto-production line into the Model e-unit to expand EV offers and Ford Blue to concentrate on conventional gasoline-powered vehicles like the Bronco sport utility vehicle.

The decision to eliminate thousands of employees is expected to affect the automaker's salaried ranks in several operational roles. Furthermore, the U.S. automobile behemoth employs around 31,000 salaried workers in the country, where most of the layoffs are expected to start this summer.

However, Ford declined to comment on the potential job cutbacks, stating that it is concentrating on restructuring the company to take advantage of the expansion of EVs. Besides, certain goals have been set to lower the cost structure to be lean and fully competitive with the finest in the industry.

Farley has asserted that employee layoffs are necessary to restore revenues, which have fallen on its electric Mustang Mach-E and other plug-in models owing to escalating commodity and warranty costs.

Meanwhile, Ford's shares had fallen 39% this year, worse than the overall market, as the automotive industry was plagued by concerns about inflation and supply chain snarls.

Source Credits –

https://www.straitstimes.com/business/companies-markets/ford-plans-up-to-8000-job-cuts-to-help-fund-electric-vehicle-investment#:~:text=DETROIT%20(BLOOMBERG)%20%2D%20Ford%20Motor,people%20familiar%20with%20the%20plan