Ford Motor Co. will lay off nearly 3,000 employees next month to reduce costs as it shifts towards producing electric vehicles (EV).
The latest job cuts are set to go into effect on September 1 and will impact approximately 1% of Ford’s 183,000 employees.
Nearly 2,000 white-collar positions will be slashed at the Ford plant in Dearborn, Michigan, and another 1,000 contracted jobs commissioned through outside agencies will also go.
Ford said it has begun notifying affected employees and will provide severance benefits and assist its soon-to-be-former workers with finding new jobs, according to an internal email signed by Executive Chair Bill Ford and Chief Executive Jim Farley.
“Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century,” the internal message stated.
Last month, several news outlets reported on the upcoming layoffs at Ford, describing the decision as part of a broader restructuring plan to sharpen the company’s focus on EVs and the batteries that power them.
Ford must reallocate resources and embrace new technologies as it transitions its core business operations into the EV sector, a spokesperson said.
The company has an oversized pool of existing workers that lack the expertise needed to develop and manufacture the next generation of electric software-laden vehicles, according to Farley.
“We need to trim costs and simplify processes so Ford’s transition to EV can move faster,” he stated.
Ford wants 50% of its global production to be EVs by 2030. To do this, the car manufacturer is splitting its core business operations into a legacy gas-engine business and another outfit better suited for developing advanced software and EVs.
Profits from Ford’s lineup of gasoline and diesel-engine vehicles will help fund the transition, Farley said.
Ford forecasts two million global EV sales by 2026 and hopes to clock a 10% pretax profit margin.
The first all-electric Ford F-150 Lightning rolled off the manufacturing line in April.
Bill Ford, the great-grandson of the company’s founder, stated that he believes the F-150 Lightning is the most important vehicle in the company’s history.
“The Model T over 100 years ago brought cars to everybody. Well, this vehicle will bring electric vehicles, particularly electric trucks, to everybody,” Ford said.