Ford Cutting Around 3,000 Jobs as It Tackles ‘Uncompetitive’ Cost Structure Amid Soaring Inflation

Tom Ozimek
By Tom Ozimek
August 22, 2022Business News
Ford Cutting Around 3,000 Jobs as It Tackles ‘Uncompetitive’ Cost Structure Amid Soaring Inflation
An employee works on the 40 millionth Ford Motor Co. F-Series truck on the assembly line at the Ford Dearborn Truck Plant in Dearborn, Mich., on Jan. 26, 2022. (Jeff Kowalsky/AFP via Getty Images)

Ford will be cutting around 3,000 jobs globally, a spokesperson said, with the move coming amid long-running speculation that the automaking giant was looking to reduce headcount as it seeks to address its “uncompetitive” cost structure as inflation has soared.

Cathie Hargett, Manager of Corporate Communications at Ford, told The Epoch Times in an emailed statement that the company plans to reduce 2,000 employee positions and 1,000 agency contractor positions.

Most of the cuts will be in the United States, with a small number in Canada and India.

The moves come as Ford has restructured into three units, including one focused on electric vehicles, and as prices of business inputs like raw materials have soared amid a broader inflationary environment.

“This is also prompting a redesign of almost every area of Ford, to ensure that we are aligned around and investing in our key priority areas, that we are improving quality and reducing structural costs,” Hargett said.

‘Significant Transformation’

The layoffs were also announced by Ford’s top executives in an Aug. 22 letter to staff, which was viewed by The Epoch Times.

“The people leaving the company this week are friends and coworkers, and we want to thank them for all they have contributed,” Ford CEO Jim Farley and Executive Chair Bill Ford wrote in the joint email.

They described Ford as going through a “significant transformation” and as trying to fix an “uncompetitive” cost structure.

“We are eliminating work, as well as reorganizing and simplifying functions throughout our business,” they wrote.

Much like consumer goods inflation, business input costs have soared to multi-decade highs. Rising prices of shipping and raw materials have pressured automakers’ bottom lines, with Ford earlier saying it faced $3 billion in higher costs due to inflation.

The layoffs, which come as a growing number of U.S. companies are reducing headcount or freezing hiring, came as little surprise. The Wall Street Journal and other media outlets reported in July that job cuts were on the way at Ford as the company seeks to adjust its operations for a bigger focus on electric vehicles.

Amid growing signs of an economic slowdown in the United States, half of U.S. companies are planning to cut jobs, according to PricewaterhouseCoopers (PwC).

“This comes as no surprise,” PwC said in a statement. “After a frenzy of hiring and a tight labor market over the past few years, executives see the distinction between having people and having people with the right skills.”

Besides 50 percent of the more than 700 U.S. executives responding to the PwC survey saying they’re reducing their overall headcount, 46 percent are dropping or reducing signing bonuses and 44 percent are revoking job offers.

From The Epoch Times

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