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

Ford will be cutting around 3,000 jobs globally, according to an internal company email, 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.

Top executives at Ford announced the layoffs in an Aug. 22 letter to staff, which was viewed by The Epoch Times.

“Overall, we are reducing our salaried workforce by about 2,000, as well as reducing agency personnel by about 1,000,” Ford CEO Jim Farley and Executive Chair Bill Ford wrote in the joint email.

The cuts apply to staff in the United States, Canada, and India.

“The people leaving the company this week are friends and coworkers, and we want to thank them for all they have contributed to Ford,” the executives said.

The move comes as the company tackles various aspects of costs and what the executives described in the email as an “uncompetitive” cost structure and “significant transformation” of the company, in particular around a bigger focus on electric vehicles.

The automotive industry is “changing with breathtaking speed,” the pair wrote, adding that the shift toward electrification requires “changing and reshaping virtually all aspects of the way we have operated for more than a century.”

“It means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors” the executives said. “We are eliminating work, as well as reorganizing and simplifying functions throughout our business.”

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.