Ford Motor is preparing to cut a total of 3,000 salaried and contract jobs with most of them being from North America and India as the car company realigns its priorities to develop software-driven electric vehicles, according to a Reuters report.
In a joint email to employees, Ford Chief Executive Jim Farley and Ford Chairman Bill Ford wrote that the company would be “eliminating work” and “simplifying functions throughout the business.” They went on to say that employees could expect to hear from their regional leaders on the specifics later in the week.
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In July, Farley had said that the job cuts would mostly affect those who worked on the combustion operations side of things. However, his email on Monday mentioned cuts across the board.
The news comes off the back Farley’s insistence over the past few months that the company had too many people but not enough skilled labour to work on electric vehicles and software services as the auto industry has begun taking steps to move away from traditional fuel like diesel and petrol. Farley’s reactions come in the face of Tesla’s pre-tax profit margins blowing past Ford’s this year.
For his part, Farley has been making moves to help the car maker develop a wider range of electric vehicles. Much like how Tesla charges subscriptions for it automated driving systems, Ford is looking to jump on to the same bandwagon. Since the company was started back in 1903, it has stuck to a traditional combustion engine technology lineup.
Ford’s primary competitor General Motors, had cut 14,000 jobs back in 2018 as it prepared itself to make the switch to electric vehicles.
However, the rising prices of batteries, raw materials and additional costs for shipping are likely to put a dampener on Ford’s EV ambitions. Even Tesla has not been immune to the supply chain disruptions brought on by the COVID-19 pandemic and the Russia-Ukraine war.