Ford cutting several hundred white-collar jobs to reduce cost amid transition to electric vehicles

DEARBORN, Mich. (AP) — Ford Motor Co. is going through another round of white-collar job cuts as the company continues to reduce costs amid a transition to electric vehicles.

The company confirmed Tuesday that it was starting to notify several hundred engineers and other salaried employees that their jobs are being eliminated. The firings come after around 200 Ford contract employees were let go last week.

Spokesman T.R. Reid wouldn’t give a specific number of Ford jobs that are being cut this week, but said they are not nearly the scale of those made last summer when the company let go of 3,000 white-collar workers and another 1,000 contractors largely in the U.S.

Most of the cuts were in engineering, but all business units will see job cuts, Reid said.

“Teams that were affected were pulled together yesterday to let them know that there would be actions taken this week. Then individual people will be notified today and tomorrow,” Reid said.

CEO Jim Farley has said much of Ford’s workforce doesn’t have the right skills as it makes the transition from internal combustion to battery-powered vehicles.

This week’s moves, he said, show that Ford is adapting to change more consistently. “It’s more real time and not kind of big titanic events,” he said, adding that the company also is hiring in some areas such as software development.

The job cuts also come as Ford tries to level out what its executives say is a $7 billion cost disadvantage to its competitors. The company also is investing over $50 billion by 2026 to develop and build electric vehicles across the globe.

Ford plans to be able to manufacture EVs at a rate of 600,000 per year by the end of this year and 2 million a year by 2026.

The company has reorganized itself into three business units, Ford Model e for electric vehicles, Ford Blue for vehicles with combustion engines and Ford Pro for commercial vehicles.

Ford’s electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology. But its commercial and combustion units are highly profitable.

Company officials said the electric vehicle unit, called “Ford Model e,” will be profitable before taxes by late 2026 with an 8% pretax profit margin.

In May Farley said he did not see reductions in the number of factory employees or among engineers and other office workers.