Ford to Reduce Employment by 3,000 Due to Reorganization and Cost Controls

Ford Motor Company NYSE:F

Ford Motor Company (NYSE:F)

Ford Motor Company (NYSE:F) recently made headlines by announcing it will lay off 3,000 workers in a broad attempt to save costs and reorganize the company. Both permanent and temporary workers will be affected by the change. The Business Services office in India, along with the United States and Canada, will bear the brunt of the layoffs. There are 3,000 workers, 2,000 of whom receive salaries and 1,000 working as contract laborers.

With the announcement of its restructuring plan in March, the company’s electric vehicles (EVs) and internal combustion engine (ICE) cars were separated into separate divisions. Ford Blue is in charge of current and future internal combustion engine (ICE) vehicles, including the Mustang, F-150, and Bronco, while the Ford Model e focuses on electric vehicles, software, and connected vehicle technology. There have been no discussions of spinning off any of these divisions, as they both operate inside the existing corporate framework of the parent business. The company also operates a third division called Ford Pro, which caters to business and government clients by offering them ICE and electric goods and services for fleet management.

Since the business reorganization efforts began, many indicators have pointed to a sizable fall in the number of employees. It had given hints about the layoffs for months.

Ford Motor Company (NYSE:F) believes it must re-allocate resources to compete with rivals since it concentrates on electrification-driven restructuring. Competencies once required for many jobs are now obsolete. As a result, it plans to reorganize its staff to increase its competitiveness and vitality.

The auto company announced a lesser round of layoffs in April, affecting 580 salaried workers (350 direct hires and 230 agency workers) as part of its Ford+ initiative. The strategy aims to improve the customer service experience while also investigating the potential of e-mobility. It predicts that EVs will make up half its global sales by 2030, further solidifying the company’s position in the rapidly growing EV market.

Ford Motor Company’s (NYSE:F) workforce, like most automakers, is primarily designed to support goods based on conventional internal combustion engines. However, to catch up to Tesla Inc. (TSLA Quick Quote), the most significant EV player in the United States, TSLA – Free Report), Ford has taken a proactive stance toward the switch to electric vehicles. Ford has become the leading U.S. seller of electric vehicles behind Tesla, introducing the electric Mustang Mach-E SUV in late 2020 and an electric version of the F-150 pickup truck this year. Ford also previously announced that it would construct two battery plants in the state of Kentucky, as well as a third battery facility and an electric vehicle plant in the state of Tennessee.

The company needs to simplify its staff with employees with the correct combination of talents if it wants to create income from digital software and connected services.

Ford Motor Company’s (NYSE:F) stock price increased by 15.3 percent last year, compared to the industry’s 1.3 percent gain.

Featured Image:  Megapixl @Luckydoor

See Disclaimer Please

About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.