In its latest effort to streamline operations and reduce costs, Ford is preparing to initiate another round of layoffs in the upcoming weeks.
The layoffs are expected to include U.S. salaried workers and accept employees in Ford’s gas engine, EV, and software divisions.
A Ford spokesman said, “Part of the ongoing management of our business includes aligning our global staffing to meet future business plans and staying cost competitive as our industry evolves.”
CEO Jim Farley stated that because the company is spending billions of dollars on shifting to electrification, it has more work to do than its rivals to cut costs. By the middle of the decade, the company hopes to reduce annual expenditures by at least $3 billion using various strategies, such as lowering complexity across the board and addressing excessive warranty costs. Farley also emphasized the need to eliminate waste in Ford’s processes related to gas-engine vehicles, which account for most of the company’s profits.
Executives believe that the automaker spends $7 to $8 billion more on its operations than competing automakers, primarily due to supply chain management and warranty costs.
Ford and other automakers have been navigating a difficult transition as they significantly boost their investment in EVs, which are still a small and unprofitable segment of their product lines compared to combustion-engine vehicles.
The automaker has committed to spending $50 billion globally through 2026 to hasten its transition. It has also reorganized operations inside to distinguish its gas-engine business from one centered on electric vehicles and software.
Since rising interest rates and inflationary pressures threaten to diminish years of robust earnings in the auto industry, major automobile corporations have tightened their belts.