Ford Motor Company manufactures various automobiles, including internal combustion engines, hybrids, and electric models, and it trades under the Ford and Lincoln brands. The company also provides digital services, accessories, and repair parts through dealership sales channels.
Due to changes in the demand for technical positions with the shift to powertrains, Ford has had to lay off workers in production, product development, and administration since 2020. Ford needs to adapt well to ensure long-term success and the well-being of its employees.
Recent Layoff Announcements
- Layoffs in Spain: Ford plans to cut 1,600 jobs at its factory in Spain. The company is looking to let go of 600 employees who have been with the company for a time and put 1,000 roles on temporary hold before the 2027 launch of a new hybrid passenger vehicle.
- Global Job Cuts: Ford is looking to reduce its workforce by 3,000 employees in the United States, Canada, and India as a part of their $3 billion cost-saving strategy for their automobile division.
- Impact on Engineering and Software Divisions: Ford’s engineering and software departments are facing budget cuts but are reducing costs to align with its focus on electric vehicles and efficiency.
Reasons behind the Layoffs
Due to the company’s shift to electric powertrains and increased operational efficiency, Ford intends to implement layoffs and some positions to reduce its workforce.
The challenges facing the automobile sector are causing companies such as Ford to reassess their staffing requirements and operational strategies with declining demand for electric vehicles and growing production costs.
The Shift to Electric Vehicles
To reach its target of investing $50 billion in the production of electric vehicles by 2026, Ford has made employment losses that have resulted in significant cost-cutting and restructuring. The need for engineers with experience in conventional engine design and development is declining as a result of the shift from internal combustion engines to electric powertrains.
Head of Ford’s German division and general manager of the company’s European electric car activities, Martin Sander, recognized this change, saying, “There is significantly less work to be done on drivetrains moving out of combustion engines. We are moving into a world with fewer global platforms where less engineering work is necessary. This is why we have to make the adjustments.”
The Impact on Employees
Ford declared its intention to lay off 2,000 salaried and 1,000 contract workers across the US, Canada, and India in 2022, with a substantial percentage of those layoffs occurring in Michigan.
As the demand for workers in internal Combustion engine technology declines, Ford intends to eliminate 3,800 product development and administration jobs in Europe by 2023, 1,300 of the positions are in the UK. According to the Faraday Institution, UK technology for gasoline and diesel engines supports around 100,000 jobs in the automotive sector.
Ford’s Upcoming Layoffs and Strategic Shifts
Ford Motor Company is preparing to lay off another round of US salaried workers, focusing on its software, gas, and electric car sectors.
As part of a broader strategy to concentrate on electric and autonomous driving technologies, Ford intends to reduce its spending on gas-powered vehicles by up to $3 billion by March 2022. Ford will be working with Rivian and Volkswagen on this project.
Following WARN notices, Ford intends to lay off 1,300 workers from Michigan sites and postpone producing electric pickup trucks until 2025.
Ford is reducing its workforce and adjusting manufacturing schedules to tackle rising customer acquisition costs and supply chain disruptions in the automobile industry.
The Role of Government Support
By encouraging the construction of infrastructure and electric vehicles, governments may assist the automobile industry in a transformation that will increase jobs and ensure the industry’s long-term sustainability.
The UK government faces charges for failing to establish a clear plan to support electric car development, preventing job losses linked to the phase-out of internal combustion engines. Des Quinn, Unite’s national officer for automotive, stated, “We’ve been crying out for an industrial strategy. There is no plan for greening the car industry.”
The Future of Automotive Employment
Automation and electric vehicle adoption will affect the automotive sector, leading to job losses but presenting opportunities in software development, battery research, and charging infrastructure.
Major Companies Laying Off Workers in 2024
Google has started making major layoffs in some divisions, including hardware, voice assistant, and advertising sales. The corporation reduced a large portion of its workforce in 2023, and to increase efficiency and streamline operations, it undertook a restructuring plan.
Amazon
Following a prior plan to reduce over 18,000 roles, Amazon is cutting workers and dismissing hundreds from MGM Studios and Prime Video departments to streamline operations and focus on impactful content.
Tata Steel
As part of a strategy shift towards lower carbon electric arc furnaces, Tata Steel proposes to close two blast furnaces in the UK, affecting 2,800 jobs and 2,500 over 18 months.
4. Microsoft
As part of its reorganization efforts, Microsoft has announced layoffs. This comes after a 2023 cut that led to 10,000 employee terminations.
Tesla
One company that has announced job losses for 2024 is Tesla, which plans to modify its personnel in response to market conditions and production demands.
Cisco
After a previous round of layoffs, Cisco intends to remove 729 positions in the San Francisco Bay Area as part of a larger economic spending match program.
UPS
UPS intends to reduce expenses by 12,000 jobs, which will impact 14% of its managerial team, in response to shifting market conditions.
PayPal
PayPal is reducing its employment by 9%, or 2,500 workers, to improve operational effectiveness and the appropriate scale of the company.
Flex port
In an effort to increase earnings after layoffs in late 2023, logistics company Flex Port fired 400 employees, or 15% of its workforce.
Sony
The difficulties in the video game industry after the epidemic have prompted Sony to announce plans to terminate some 900 employees at its PlayStation division.
Conclusion
Ford layoffs highlight the auto industry’s challenges in transitioning to electric vehicles but may encourage technology adoption through retraining programs and government collaboration.
Frequently Asked Questions about Ford Layoffs
Q: Why is Ford cutting employees?
A: Ford is implementing cost-cutting measures, including engineering layoffs and demotions, to reduce its workforce and transition to electric cars.
Q: What are the challenges facing Ford?
A: Ford Motor Company is currently resolving several production and sales-related problems. The COVID-19 pandemic has caused significant harm to the automotive industry. People have been delaying buying cars because of missing parts from manufacturers, decreased orders, and employment instability.
Q: Did Ford fire 70% of EV workers?
A: Ford is allegedly cutting staff and output on its electric truck, the F-150 Lightning, although not to the extent of laying off 70% of its EV employees. Below are the key details:
- From the 2,100 personnel it had during the F-150 Lightning project, Ford is cutting 1,400 employees from its Rouge Electric Vehicle Center in Dearborn, Michigan.
- The corporation stated that the decline in demand for electric cars was the reason for the production drop.
- Although original predictions were lower, Ford expects a small increase in global sales of electric vehicles (EVs) in 2024.
- Ford is adding 700 jobs and hiring roughly 900 more people at its Michigan Assembly facility.
Q: Which departments have the layoffs?
A: The areas most impacted by Ford’s layoffs were administration, product development, and production. The increasing focus on electric vehicles has led to a rise in job vulnerability in internal combustion engine technology
Q: Are the layoffs permanent?
A: Spain’s latest layoffs may be temporary or permanent, with the potential to refill just 1,000 of those jobs in 2027 when a hybrid passenger car begins production.
