Ford lays off engineering staff in the United States and Canada

On Monday, Ford Motor announced its plans to initiate layoffs this week, primarily impacting engineering positions in the United States and Canada. These job reductions are anticipated to affect all three of Ford’s business divisions: Ford Blue, Model e, and Ford Pro.

Ford headquarter / via Getty Images

Ford has announced that it will carry out layoffs this week, primarily impacting engineering positions in the United States and Canada. These job cuts are part of Ford’s efforts to implement cost-cutting measures and restructure its business operations, aiming to save billions of dollars.

The layoffs are expected to affect all three of Ford’s business units: Ford Blue (traditional internal combustion engine operations), Model e (electric vehicle unit), and Ford Pro (fleet service operations). The exact number of employees affected has not been disclosed by the company.

In their recent quarterly filing in May, Ford stated that they anticipated charges between $1.5 billion and $2 billion in 2023, primarily due to employee separations and supplier settlements. These figures are in comparison to similar actions taken in 2021 and 2022, which resulted in charges of $2 billion and $608 million, respectively.

Ford has been implementing a series of operational changes for a number of years as part of its Ford+ strategy, spearheaded by CEO Jim Farley. In August, the company reduced its workforce in North America by 3,000 employees, and more recently, it carried out 3,800 layoffs in Europe.

In its first-quarter filing, Ford stated, “We are continuously evaluating our global operations and may undertake further restructuring measures in cases where achieving sustained profitability would not be viable, given the capital investment needed for those particular businesses.”

Ford Motor Company is addressing its approximately $7 billion cost disadvantage compared to competitors by implementing efficiency improvements and reducing its workforce. Last year, Ford’s employee headcount decreased by around 10,000 individuals to a global total of 173,000, as stated in a public filing.

The company’s objective of achieving growth and value creation through its Ford+ plan involves enhancing quality, reducing costs, prioritizing investments, and aligning staffing with necessary capabilities. Employees affected by the changes will receive severance pay, benefits, and extensive support in finding new career opportunities.

The recent layoffs were initially reported last week, with certain contractors being informed that they would no longer work with the company. Team leaders whose departments are affected were notified today, and employees are expected to receive notifications throughout the middle of the week, according to sources familiar with the company’s plans. As the layoffs are carried out, the affected units have been instructed to work remotely this week.

Ford is not alone in reducing its workforce as it realigns its business toward electric vehicles. Competitor General Motors has also implemented layoffs and an employee buyout program costing $875 million in the first quarter. Likewise, Stellantis, the maker of Jeep, confirmed in April that it was offering voluntary buyouts to approximately 33,500 U.S. employees as part of its cost-cutting and workforce reduction efforts.

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