Ford Reportedly Planning Additional Layoffs in 2023
Ford has been undergoing a restructuring process for years, and it seems that the company is planning to lay off more employees in the coming weeks. According to reports, the layoffs will affect staff from multiple business units, including the combustion-focused Ford Blue division and the Model e electric vehicle unit. However, the number of people getting laid off is not expected to match what we’ve seen before.
The Brunt of the Cuts Will Target Salaried U.S. Employees
The Wall Street Journal reports that the brunt of the cuts will target salaried U.S. employees. Ford has not confirmed the number of people getting laid off, but the company said that it aligns its staffing around the skills and expertise needed to deliver on its growth plan. The company has previously stated that it wants to reduce annual expenses by $3 billion by reducing complexity and dealing with high warranty costs.
CEO Jim Farley’s Strategy
CEO Jim Farley has suggested trimming unnecessary portions of Blue Oval’s gasoline engine operations. Provided he doesn’t carve out any of the profitable bits, it could be a sound strategy. However, some are concerned that Ford is betting too heavily on electrification. While this could be true from an investment perspective, the company is well aware that the brunt of its present-day sales stems from combustion vehicles.
Ford’s Commercial Vehicles
Ford has stressed the importance of its commercial vehicles and recently updated Ford Pro to encourage fleet sales and customer retention. The company is aware that its present-day sales come from combustion vehicles, and it cannot afford to ignore this fact.
Ford’s Net Loss in 2022
Ford took a pretty big hit in 2022, reporting a $2 billion net loss. While these are tough times for numerous automakers, Ford’s operational costs seem much higher than its competitors. Executives have suggested that the company spends billions more than necessary to address supply chain management and warranty expenses.
Other Automakers Offering Buyouts
Stellantis and General Motors have likewise been offering employees buyouts this year, with both hoping to address mounting operating costs. It seems that Ford is not alone in stressing over finances.
Previous Layoffs
To help cope with its own overhead, Ford laid off roughly 3,000 employees in 2022 and started 2023 by announcing that it would need to reduce its European workforce by roughly 3,800 heads. The automaker has also split itself into different divisions focused on traditional combustion engines and all-new electric models. However, the latter unit is expected to lose several billion dollars this year.
Conclusion
Ford’s restructuring process has been ongoing for years, and it seems that the company is planning additional layoffs in 2023. The brunt of the cuts will target salaried U.S. employees, and the number of people getting laid off is not expected to match what we’ve seen before. CEO Jim Farley has suggested trimming unnecessary portions of Blue Oval’s gasoline engine operations, but some are concerned that Ford is betting too heavily on electrification. The company is well aware that the brunt of its present-day sales stems from combustion vehicles, and it has stressed the importance of its commercial vehicles. Ford took a pretty big hit in 2022, reporting a $2 billion net loss, and the company’s operational costs seem much higher than its competitors. Stellantis and General Motors have likewise been offering employees buyouts this year, with both hoping to address mounting operating costs. To help cope with its own overhead, Ford laid off roughly 3,000 employees in 2022 and started 2023 by announcing that it would need to reduce its European workforce by roughly 3,800 heads.
