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Earlier this month, Ford reported mixed earnings results for Q4 2022, performing below analysts’ expectations.
Automobile manufacturer Ford Motor Company (NYSE: F) has announced its plan to transition to a “leaner” structure, which will result in dismissing nearly 4,000 employees. The company is shifting its focus on EV production and precisely cutting 3,800 jobs across Europe over the next three years. This came after the company slashed its Mustang Mach-E EV prices earlier this year as competition intensified in the electric vehicle market. In its transition move, it has also dumped smaller cars like Focus and Fiesta from Europe.
Ford Plans to Reduce Employees as It Focuses on EV Production
Ford said it would dismiss employees in product development and administration in Germany by 2,300 while it slashes 1,300 jobs in the UK. Also, 200 workers will fall victim somewhere else within Europe. About 1,000 jobs will be cut from product development in Germany as Ford restructures. According to Ford UK head Tim Slatter, there is less product development work to be done due to simplification. He explained that after the development of the technology, it is easier to repeatedly install it in future automobiles.
Ford plans to maintain about 3,4000 engineering roles in Europe. The roles are focused on the designing and development of vehicles, as well as the creation of related services. However, reducing the workforce will not impact the automaker’s target of rolling out an all-electric fleet by 2035. Ford already expects to begin the production of its first European-built electric passenger vehicle before the end of 2023.
The general manager of Ford Model E in Europe, Martin Sander, acknowledged that firing employees is a difficult decision for the company. He added that there is provision to support the affected workers over the coming months. Sander continued:
“Paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build, and sell Ford vehicles. This will impact the organizational structure, talent, and skills we will need in the future.”
Ford’s Q4 2022’s Financial Performance
Earlier this month, Ford reported mixed earnings results for Q4 2022, performing below analysts’ expectations. However, it came out as the best-selling truck in America for 46 straight years and the top vehicle of any kind for 41 years, as it shipped over 650,000 F-Series trucks last year. Looking ahead, Ford expects to generate $9 billion to $11 billion in adjusted EBIT in 2023.
After closing up nearly 3%, Ford stock is currently up 0.15% to $13.1 in premarket trading. The company’s stock price has pumped 12.55% since the year started and another 3.31% over the past month. However, F has lost 27.60% in the last twelve months, 8.46% over the past month, and nearly 3% in the last five days.