Ford to eliminate 3,000 jobs in an effort to cut costs

Ford to eliminate 3,000 jobs in an effort to cut costs

Ford F-150 Lightning at the 2022 New York Auto Show.

Scott Mlyn | CNBC

DETROIT – Ford Motor is cutting about 3,000 jobs from its global workforce, as the automaker attempts to lower costs as part of restructuring efforts under CEO Jim Farley.

Ford began notifying workers of the reductions on Monday, a company spokesman confirmed. The cuts are for 2,000 salaried positions and 1,000 agency jobs in the U.S., Canada and India, Farley and Ford Chair Bill Ford said in a message to employees that was obtained by CNBC.

“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,” the message reads.

Ford’s cost-cutting actions are the latest in a series of efforts by companies to reduce expenses and employee head count amid fears of a potential recession or economic softening, with inflation hovering near a 40-year high.

The cuts, which were first reported Monday by Automotive News, come less than a month after Farley told analysts that “we absolutely have too many people in certain places, no doubt about it.”

The reductions are occurring across Ford’s businesses, which it split into two units earlier this year to separate its electric and internal combustion engine businesses.

“There are opportunities to be more efficient and more effective in all the business units and all the functions that support them,” Ford spokesman T.R. Reid told CNBC.

Ford employs about 31,000 salaried workers in North America. As of the end of last year, Ford had 186,769 employees globally, with 90,873, or 48.7%, of those workers located in the U.S.

Under Farley, who became CEO in October 2020, Ford is going through a massive transformation of the company called Ford+ that includes plans to cut $3 billion in structural costs by 2026, while investing billions to expand its electric and commercial vehicle businesses.

“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,” read the message to employees.

Ford’s stock was down about 5% in afternoon trading Monday to $15.10 a share. The shares are down about 27% in 2022.