Image source: Inc.
The economic situation in the United States has prompted several companies to lay off part of their workforce.
Ford Motor is the latest company to lay off employees to cut costs.
The report
Ford is cutting about 3,000 jobs from its global workforce as part of its restructuring efforts under CEO Jim Farley.
A company spokesperson said the news was made public on Monday, when employees were told of the reduction.
Farley and Ford Chairman Bill Ford have sent a message to workers that the cuts will create 2,000 paid jobs and 1,000 temporary jobs in the United States, Canada and India.
In July, reports circulated that Ford had factories firing workers and firing up to 8,000 workers.
Read also: Dan Price, the CEO who slashed his salary to $70K, steps down amid assault charges
The memo
Ford and Farley sent the memo, which reads:
“Ford Team,
As you know, we are in the midst of a significant transformation of our company. Our industry and the business environment in which we operate are changing with breathtaking speed.
We have an opportunity to lead this exciting new era of connected and electric vehicles; create the most growth and value for Ford and our stakeholders since we scaled the Model T; and continue to make a positive difference in our customers’ lives and on society at large.
Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century. It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors.
We committed to sharing information as decisions are made along the way. As we tackle all aspects of costs – from materials to those related to quality – we are informing some Ford teammates this week in the U.S., Canada and at FBS in India, that their positions are being eliminated. Overall, we are reducing our salaried workforce by about 2,000, as well as reducing agency personnel by about 1,000. These actions follow significant restructuring in Ford operations outside of North America over the past couple of years.
We worked differently than in the past, examining each team’s shifting work statement connected to our Ford+ plan. We are eliminating work, as well as reorganizing and simplifying functions throughout the business. You will hear more specifics from the leaders of your area of the business later this week.
None of this changes the fact that this is a difficult and emotional time. The people leaving the company this week are friends and coworkers and we want to thank them for all they have contributed to Ford. We have a duty to care for and support those affected – and we will live up to this duty – providing not only benefits but significant help to find new career opportunities.
Thank you for all you do for Ford. Please continue to support each other, including colleagues who are leaving the company, as we build a strong and sustainable future.
Bill and Jim”
Influence of the inflation
The company’s efforts are part of a series of other efforts to cut costs and workers in the face of a potentially looming recession, especially with inflation hitting a 40-year high.
The cuts caused a stir on Monday after Automotive News released reports, less than a month after Farley said, “we absolutely have too many people in certain places, no doubt about it.”
The cuts will affect all business units of the company, which was split into two entities earlier this year to separate its electric motor and internal combustion engine businesses.
Read also: Apple Revenue Reports Show iPhone Still the Bestsellers, Other Products Have Decline in Sales
Ford
Ford employs over 31,000 people in the United States and had 186,769 employees worldwide at the end of 2021.
About 48.7% or 90,873 of the global workforce works in the United States.
When Jim Farley became Ford’s CEO in October 2020, the company underwent major changes dubbed Ford +, including plans to reduce structural costs by $3 billion by 2026.
Ford has also invested billions in expanding its electric vehicle and commercial vehicle business.
On Monday afternoon, the company’s stock was down 5% to $ 15.10 per share.
In 2022, shares fell by about 27%.
References:
Ford is laying off thousands of employees, and here’s the memo explaining the change
