Ford is planning to cut at least 1,000 salaried and contract workers in North America.
The automaker’s decision comes as it seeks to offset the significant costs associated with its investments in electric vehicles (EVs).
In internal meetings held on Monday, Ford notified some of its salaried workers in North America about the impending job cuts.
Read More: Ford cuts engineering units in US and Canada
A company spokesperson confirmed the news, noting the layoffs would primarily target the engineering ranks as part of a broader effort to control costs across various business units.
Over the past year, it has implemented several rounds of layoffs globally, including a reduction of 3,000 positions in the US last summer and a slightly larger layoff in Europe earlier this year.
Currently, Ford employs around 28,000 salaried workers in North America.
The latest reduction in its white-collar workforce will impact its electric-vehicle and software divisions and those in the gas-engine and commercial-vehicle units.
Read More: Ford readies new wave of layoffs for US workers
Managers at the company held meetings on Monday to inform affected employees about the layoffs and advised them to work from home for the rest of the week.
Many automakers, including General Motors and Stellantis, have been focusing on cost-cutting measures to cope with the hefty costs of EV investments.
They have initiated buyout programs to control expenses while channeling more resources into electric and digital technologies.
Ford CEO Jim Farley has acknowledged that the company’s legacy business of internal-combustion-engine vehicles is less efficient than competitors, necessitating further cost reductions.
Ford’s annual costs are $7 billion to $8 billion, higher than rival automakers.
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The company is streamlining supply-chain spending, simplifying its vehicle lineup, and tightening warranty costs to address this cost disparity.
It aims to improve profit margins in the internal-combustion side of the business, as the profitability of EVs is projected to be limited for several years due to scaling up production and reducing battery costs.
While Ford expects to lose $3 billion in operating profit on its EV business this year, it believes that profits from its gas-engine operations will sustain the company.
The layoff announcement comes ahead of the scheduled negotiations with the United Auto Workers union for a new four-year labor contract for hourly factory workers.
