Ford plans to cut up to 8,000 jobs to help fund EV investment | Rare Techy

Ford Motor Co. is preparing to cut up to 8,000 jobs in the coming weeks as the automaker tries to boost profits to fund its push into the electric vehicle market, people familiar with the plan said.

The liquidation will take place at the newly created Ford Blue unit, which is responsible for the production of internal combustion engine vehicles and other salaried operations across the company, the people said, who asked not to be identified, revealing internal discussions. The plan has not been finalized and the details are subject to change.

The move would be a key step in CEO Jim Farley’s plan to cut US$3 billion by 2026. He has said he wants to make Ford Blue “a profit and cash engine for the entire company.” In March, Farley carried out a radical restructuring of Ford, splitting its auto manufacturing division into two, creating a “Model e” unit to boost electric vehicle offerings and a “Ford Blue” unit to focus on traditional gas-burners like the Bronco sports utility vehicle.

The job cuts are expected to come on the payroll at Ford across a variety of operational functions, people familiar with the matter said. They could come in phases but are likely to start this summer, the people said. Ford employs about 31,000 salaried workers in the U.S., where most of the cuts are expected.

Ford declined to comment on potential job cuts, saying it was focusing on restructuring the organization to take advantage of the growth in electric vehicles. “As part of this, we have set clear targets to lower our cost structure to ensure we are lean and competitive with the best in the industry,” the company said in a statement.

Farley has said the layoffs are the key to boosting profits, which have evaporated due to rising commodity and warranty costs for the electric Mustang Mach-E and other plug-in models.

“We have too many people,” Farley said at the Wolfe Research automotive conference in February. “This management strongly believes that our ICE and BEV portfolios will continue to deliver.”

Ford shares have fallen 39 percent this year through Tuesday, underperforming the broader market, amid inflation fears and supply chain failures that have rocked the auto industry.

In March, Farley increased spending on electric vehicles to US$50 billion and set out a plan to build 2 million battery electric vehicles a year by 2026, after only 27,140 were sold in the US last year. Last month, Ford saw a 76.6 percent year-over-year increase in EV sales as it launched a hot new electric pickup truck, the F-150 Lightning.

To fund Ford’s electric ambitions, Farley has said it needs the company’s traditional gas-powered models to make more money.

“This $50 billion in funding is based on our core automotive business,” Farley said in a March interview with Bloomberg Television. “That’s why we created a separate group called Ford Blue because we need them to be more profitable to finance it.”