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Like Ford, many companies have been cutting costs and lowering headcounts due to the ongoing market condition.
American automobile manufacturer Ford Motor Company (NYSE: F) is cutting 3,000 jobs as it makes efforts to reduce costs. The company is eliminating the jobs, including salaried and contract employment, from its entire global workforce, majorly in North America. Ford is restructuring and on the move to catch up with EV giant Tesla Inc (NASDAQ: TSLA) in the race to manufacture software-baked electric vehicles.
Ford Spokesperson Confirms Elimination of 3,000 Jobs to Cut Cost
A spokesperson for Ford confirmed that employees gained knowledge of the plans to reduce jobs on Monday. Specifically, the restructuring will affect 2,000 staff with salaried positions and 1,000 agency jobs. The company employs about 31,000 workers who receive salaries in North America. The automobile manufacturer had 186,769 across the globe as of the end of 2021. Out of the total workforce, 48.7% are in the US, representing 90,873. Ford CEO Jim Farley and Chair Bill Ford revealed that eliminating the jobs would cut across India, Canada, and the US. In a joint mail, the executive said the company is removing work and, at the same time, reorganizing and simplifying functions throughout the business. They told the staff to wait for specific information from the head of their units later in the week. The message further read:
“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.”
Like Ford, many companies have been cutting costs and lowering headcounts due to the ongoing market condition. A lot of firms have dismissed large numbers of their workforce with rising fears of a potential recession. Particularly, US inflation recently reached a 40-year high at 10.1%.
Ford’s Job Reduction Spans Over Both Businesses
Furthermore, Ford said that lowering jobs would spread across its two business units. The automaker split its business into two units earlier this year, separating EVs from internal combustion engines. The company is trying to generate income through services backed by digital software and connectivity. Ford has been undergoing significant transformations called Ford+ since Farley became CEO in October 2022. Part of the Ford+ plans is to cut $3 billion in structural costs by 2026. A portion of the message sent to employees stated:
“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.”
Currently, at $15.09 in extended trading hours, Ford stock has dropped 27.40% since January. The company has also lost 8.22% in the last five days and 5% during the Monday session. Furthermore, the company has increased 15.29% over the past year and over 21% in the last three months. Over the past month, the automobile maker has grown 20.26%.