Recession around the corner? Fords to layoff 3000 employee in US and India

One of the largest and oldest automobile manufacturers in the world, Ford, is on a layoff spree

Recession around the corner? One of the oldest and the largest automobile manufacturers in the world, Ford, is on a layoff spree as the company has decided to cut white-collars and contractual employees in a bid to slash costs.

The US-based car maker Ford Motor has reportedly confirmed that it is laying off roughly 3,000 employees and contractual workers starting with US, Canada and India. According to a leading daily, “Ford sent an internal email to employees, saying it would begin notifying affected salaried and agency workers this week of the cuts.”

The report further revealed that 2,000 of the targeted layoffs have salaried jobs at Dearborn, Michigan. The remaining 1,000 employees are working in contract positions with outside agencies, the company said. The job cuts are effective September 1.

The email, signed by Executive Chairman Bill Ford and Chief Executive Jim Farley said, “Ford is changing the way it operates and redeploying resources as it embraces new technologies that were not previously core to its operations, such as developing advanced software for its vehicles.”

Farley has said recently, “Ford has too many employees, and that the existing workforce doesn’t have the expertise needed to transition to a portfolio of electric, software-laden vehicles.” He has further said that he eyes for “cutting $3 billion in annual costs by 2026 to reach a 10 per cent pretax profit margin by then, up from 7.3 per cent last year.”

Several media houses reported last month that layoffs were “coming for white-collar staff as part of a broader restructuring” to sharpen the car company’s focus on “electric vehicles and the batteries” that power them.

The reason behind Ford’s drastic decision?

Further reports suggest that Ford wants to be able to produce 600,000 electric vehicles (EVs) annually by late 2023 and more than 2 million units by 2026. Thus, the company will require a $50 billion investment to achieve its 2026 goal, and it’s already behind in the EV race. The aggressive layoff move will free up cash and boost the invest in the future.