Ford To Cut 3,000 White-Collar Jobs to Reduce Costs

Ford Motor Co announced, this week, a plan to cut roughly 3,000 white-collar jobs to reduce their costs in order to support their long-term goal of transitioning from traditional, internal combustion vehicles to electrical vehicles.

In an email to employees, CEO Jim Farley and Executive Chairman Bill Ford revealed that Ford will be providing severance benefits to those affected, including crucial assistance to helping them find new jobs. At the same time, they also said this is an opportunity for the company to take the lead in the emerging connected and electric vehicles market(s).

The email describes, “Building on this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century. It means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new companies.”

The need for these job cuts comes at a time when the entire auto industry is facing a bit of an identity crisis. After all, petroleum-powered vehicles have been the cornerstone of the industry for more than a century. But as global governments continue to push to eliminate combustion engines to help address climate change issues, companies like Ford now must facilitate big changes.

For Ford, then, these changes include examining the shifting work within each team and deciding which cuts create the most opportunity. Apparently, this scrutiny revealed that Ford’s current cost structure is not competitive with Tesla or even General Motors. As a matter of fact, Farley has repeatedly said their 182,000 global workforce is too big. Reducing some of these numbers will help trim the costs they need to make the electric vehicle transition.

They plan to do this by eliminating some work and also reorganizing and simplifying some functions across many aspects of the business. This will result in letting go of about 2,000 full-time salaried staff as well as an additional 1,000 contract workers. These cuts will represent about 6 percent of their 31,000 full-time/salaried roster across plants in the United States and Canada.

The cuts will not affect Ford’s 56,000 union factory workers.