Ford Motor Co. plans to fire hundreds of salaried workers, primarily engineers, in the US this week to boost profit and lower costs amid a $50 billion shift to electric vehicles, according to people familiar with the matter.
The automaker is cutting engineers in all three areas of its business, EVs, traditional internal combustion-engine models and commercial vehicles, said T.R. Reid, a company spokesman. The workers will be informed Tuesday and Wednesday.
“We’re not cost competitive,” Reid said in an interview. “We have specific priorities and ambitions that have implications for skills, assignments and staffing needs. These changes are consistent with that. They’ll make us cost effective.”
Ford didn’t say how many workers it is cutting, but people familiar with the actions, who asked not to be identified discussing private matters, said it was in the hundreds.
Chief Executive Officer Jim Farley said earlier this year that Ford needed 25% more engineers to produce its models than rivals and that is costing the company billions in profit.
The company has said it will lose $3 billion in 2023 on its nascent EV business, but Farley pledged that battery powered models would generate an 8% return, before interest and taxes, by the end of 2026. He has a plan to build 2 million EVs a year by then, up from about 130,000 last year.
Last week, Ford and its South Korean battery partner SK On received a $9.2 billion loan from the US Department of Energy for the construction of three battery plants in Kentucky and Tennessee. The United Auto Workers union, which represents Ford’s hourly employees, blasted the loan as a “massive” government handout.
