Ford Motor Co. will cut about 3,000 white-collar jobs, including 120 jobs in Canada, as it tries to lower costs and switch from combustion engines to electric vehicles, a spokesperson confirmed to CBC News.
Executives at the Dearborn, Michigan-based automaker announced in a company-wide email Monday that 2,000 full-time salaried workers will be laid off, along with another 1,000 contract workers.
The payroll cuts represent about 6 percent of the 31,000 employees in the U.S. and Canada. Ford’s 56,000 union factory workers are not affected. Some workers will also lose their jobs in India.
Cuts are being made across the company in the US, Canada and India.
The job losses come at a time of unprecedented change in the auto industry, which has powered petroleum-powered vehicles for more than 100 years. Governments around the world are trying to phase out combustion engine cars to mitigate the effects of climate change. Companies like Ford plan to phase out their combustion operations over several years, although they are still raising money to fund electric vehicle development.
Ford has announced that it plans to make half of its global production electric vehicles by 2030.
CEO Bill Ford and CEO Jim Farley said in an email that Ford will offer benefits to employees and significant assistance in finding new jobs.
They wrote that Ford has the opportunity to lead in the new era of connected and electric vehicles.
“Building on that future will require changing and reshaping nearly every aspect of what has been going on for more than a century,” the email said. “That means reallocating resources and dealing with our cost structure, which is uncompetitive with traditional and new businesses.”
Farley and Ford wrote that they studied each team’s shift work to determine where to make cuts. The company decided that its cost structure was not competitive with General Motors, Stellantis and Tesla. It has previously said it aims to reduce the annual structural costs of internal combustion vehicles by $3 billion.
“We are cutting jobs, as well as reorganizing and streamlining functions across the company,” they wrote in an email.
A spokeswoman said the cuts were made across all areas of the company, including its large workforce of internal combustion engineers.
The company has already restructured in Europe, Asia and India.
Cut costs when switching to electric vehicles
Farley has repeatedly said the company has too many people and needs to cut costs so it can move faster in its transition to electric vehicles.
In the company’s July earnings conference call, Farley said the company was too complex because its costs were not competitive. Also, there are too many workers in some areas.
“We have skills that no longer work,” he said. “We have jobs that need to be changed.”
Farley has said that he has too many versions of internal combustion engines. Farley said there are plans to build more models with the same EV underpinnings, spending capital on customer-impacting areas such as software, digital displays and automated driving systems.
Ford has reorganized itself into three business units, one for electric vehicles, another for commercial vehicles and the last one for internal combustion engine vehicles.