BUSINESS: Ford lays off about 3,000 people

Ford Motor Co. will cut about 3,000 white-col­lar work­ers to cut costs and shift from inter­nal com­bus­tion engine vehi­cles to elec­tric vehicles.

The Dear­born, Michi­gan-based automak­er leader announced in a com­pa­ny-wide email on Mon­day that it will lay off 2,000 full-time and 1,000 con­tract workers.

This reduc­tion rep­re­sents approx­i­mate­ly 6% of the 31,000 full-time salaried work­ers in the Unit­ed States and Cana­da. The 56,000 union mem­bers who work at Ford’s fac­to­ries are unaf­fect­ed. There will also be work­ers who will lose their jobs in India.

Chair­man Bill Ford and CEO Jim Far­ley announced in an email that Ford will sig­nif­i­cant­ly sup­port ben­e­fits and re-employ­ment of workers.

They wrote that Ford has a chance to lead a new era of con­nect­ed and elec­tric vehicles.

“Build­ing this future requires trans­form­ing and restruc­tur­ing near­ly every aspect of more than 100 years of busi­ness oper­a­tions,” the email said. “It means rede­ploy­ing resources and deal­ing with cost struc­tures that are uncom­pet­i­tive with tra­di­tion­al and new firms.”

Far­ley and Ford wrote that they looked at each team’s chang­ing per­for­mance to decide where to cut. It deter­mined that the com­pa­ny’s cost struc­ture was not com­pet­i­tive with Gen­er­al Motors, Stel­lan­tis, and Tesla.

“We are elim­i­nat­ing jobs while simul­ta­ne­ous­ly reor­ga­niz­ing and stream­lin­ing func­tions across our busi­ness,” they wrote in an email.

A spokes­woman said cuts were made in all areas, includ­ing a large inter­nal com­bus­tion engine engi­neer layoff.

We have already imple­ment­ed restruc­tur­ing in Europe, Asia and India.

Far­ley has repeat­ed­ly said it is over­staffed and needs to cut costs to move more quick­ly to elec­tric vehicles.

At the com­pa­ny’s earn­ings brief­ing in July, Far­ley said the com­pa­ny was “too com­pli­cat­ed and not cost-com­pet­i­tive.” Also, some places have too many employees.

“There are skills that don’t work any­more,” he said. “I have a job that needs to change”

Far­ley says there are too many inter­nal com­bus­tion car ver­sions. Far­ley said he plans to cre­ate more mod­els based on the same elec­tric vehi­cle, invest­ing cap­i­tal in areas that affect cus­tomers, such as soft­ware, dig­i­tal dis­plays and autonomous dri­ving systems.

Far­ley says the cuts are deter­mined by exam­in­ing the workflow.

Ford has reor­ga­nized into three busi­ness units: Elec­tric Vehi­cles, Com­mer­cial Vehi­cles and Inter­nal Com­bus­tion Engines.