Ford, a U.S. carmaker, said Tuesday it plans to lay off 3,000 office workers. It is a move to reorganize the business around electric vehicles.
Ford announced in an internal email that it would reduce about 2,000 full-time workers and about 1,000 contract workers in the U.S., Canada, and India.
Earlier, Bloomberg reported last month that Ford would reduce the number of lay off by up to 8,000. However, Ford’s system, which has been around for more than 100 years as an internal combustion engine vehicle, is seen as a signal of change in earnest. It is also expected to affect other automobile manufacturers that are increasing investment in electric vehicles.
In an email signed by Chairman Bill Ford and CEO Jim Farley, the Wall Street Journal (WSJ) explained, “Ford is changing its operations and rearranging resources as it embraces new technologies that were not previously key to operations, such as developing high-end software for vehicles.”
“This is a difficult and emotional time,” Bloomberg said in an email. Those who leave the company are friends and colleagues, and I want to thank them for everything they’ve contributed.”
The e-mail also said, “To build this future, we have to change and recreate almost all aspects of the way we have operated for more than 100 years.”
CEO Pali also diagnosed in February that Ford has too many employees and that existing personnel do not have the expertise needed to convert to an electric vehicle portfolio equipped with software. He said his goal is to save $3 billion (about 4.29 trillion won) annually by 2026 with a goal of achieving a 10% pre-tax profit margin.
The Washington Post (WP) pointed out that the layoffs came about a month after Ford announced its second-quarter earnings of $3.7 billion, which tripled from a year earlier on the 27th of last month.
Ford, which is investing to reduce the sales gap with Tesla, the leader of electric vehicles, is planning to spend about $50 billion on developing electric vehicles by 2026. Global sales target 2 million units.
