Ford Motor will conduct layoffs this week, primarily targeting engineering positions in the US and Canada.
The automaker strives to significantly reduce costs by undergoing a business restructuring process.
The cuts are expected to hit its three business units: Ford Blue, its traditional internal combustion engine operations; Model e, focusing on electric vehicles; and Ford Pro, dedicated to fleet services.
Read More: Ford readies new wave of layoffs for US workers
A company spokesperson declined to disclose the exact number of affected employees.
Ford’s quarterly filing in May indicated an anticipated expense ranging between $1.5 billion and $2 billion in 2023, primarily attributed to employee separations and supplier settlements.
In comparison, the company incurred expenses of $2 billion and $608 million in 2021 and 2022, respectively, for similar actions.
Under CEO Jim Farley’s leadership, Ford has been engaged in operational restructuring efforts for several years through its Ford+ plan.Â
Read More: Uber cuts 200 recruiters in cost-saving move
In August, the automaker eliminated 3,000 positions in North America and more recently implemented 3,800 layoffs in Europe.
Ford said in its first-quarter filing it continues to evaluate its global operations and may undertake additional restructuring actions in businesses where sustained profitability is not feasible, considering the required capital allocation.
Farley said Ford faces a cost disadvantage of approximately $7 billion more than some competitors, and it aims to address this by achieving efficiency gains and reducing its workforce.
According to a separate public filing, Ford’s employee headcount decreased by around 10,000 to 173,000 in the previous year.
Read More: BlackRock to axe one percent of its staff
In an emailed statement, Ford said implementing its Ford+ plan includes measures to enhance quality, reduce costs, invest in priorities, and align staffing with necessary capabilities.
The company assured affected employees would get severance pay, benefits, and help to find new career opportunities.
Reports of the recent reductions initially surfaced late last week, with certain contractors receiving termination notices.
Team leaders whose units are affected were informed, and employee notifications are expected to continue until midweek.
Need Career Advice? Get employment skills advice at all levels of your career
The affected units have been instructed to work remotely during this implementation period.
Ford is not the only automaker reducing its workforce as it shifts focus towards electric vehicles.
Rival company General Motors has also initiated layoffs and a buyout program that cost $875 million in the first quarter.
Additionally, Stellantis, the parent company of Jeep, offered voluntary buyouts to approximately 33,500 US employees to cut costs and streamline operations.