Ford Announces Massive Layoffs as Company Shifts to Electric Vehicles

As many as 3,000 Ford employees may receive a pink slip this week, as the automotive company announced it plans to cut thousands of jobs to allocate more financial resources to its electric vehicle production. Ford informed employees of the decision in a letter on Monday.

The massive job slash could be the first of several, as Ford announced last month it plans to cut as many as 8,000 jobs in weeks' time to boost profits to fund a stronger drive into the electric vehicle market.

The job slash is a leap forward in CEO Jim Farley's plan to cut $3 billion in costs by 2026. Car and Driver reported Farley plans to trim down costs in business operations and internal-combustion products.

Who Is Getting Laid Off?

Most if not all the job eliminations will come in the Ford Blue unit. The unit is responsible for producing internal-combustion engine vehicles such as those that use gasoline. Other salaried operations positions in the company also will be cut.

The Ford Blue unit was created in March of this year alongside a second new unit called Ford Model e. Ford Blue was established to oversee existing and future internal-combustion engine vehicles such as the Mustang, F-150 and Bronco. Ford Model e focuses on connectivity and electric vehicles.

Ford Slashes Jobs To Fund EV Push
A "sold" Ford Mustang Mach-E SUV crossover electric vehicle sits in the showroom of Star Ford Lincoln dealership in Glendale, California. Ford sent a letter to employees Monday informing them the company plans to cut 3,000 jobs. George Rose/Getty Images

TechCrunch reported that the automaker raised its profitability projections and operating-profit margins after the units were announced. Reports show Ford hopes for EVs to account for 50 percent of its global sales by 2030.

Reports also show Ford's current EV sales are low—only accounting for a fraction of the company's car sales. According to Inside EVs, electric vehicles account for just over 4 percent of Ford's sales. Despite the low percentage, in May, Ford delivered 6,254 EV units, an increase of 222 percent year-over-year.

The Ford Mustang Mach-E remains Ford's most popular vehicle according to Inside EVs, followed respectively by Ford E-Transit and Ford F-150 Lightning.

Automotive News reported that a Ford spokesperson confirmed the letter sent Monday from Farley and Executive Chair Bill Ford was authentic. According to Automotive News, Ford also plans to reorganize its organization and simplify functions.

"None of this changes the fact that this is a difficult and emotional time," the letter said. "The people leaving the company this week are friends and coworkers and we want to thank them for all they have contributed to Ford. We have a duty to care for and support those affected—and we will live up to this duty—providing not only benefits but significant help to find new career opportunities."

Newsweek reached out to Ford for comment.