As part of its reorganization efforts under CEO Jim Farley, Ford Motor Company is reducing its global staff by around 3,000 positions in an effort to slash expenses.
A spokeswoman for Ford confirmed that the business started informing employees of the reductions on Monday. In a communication to staff members that CNBC was able to get, Bill Ford, chairman of Farley and Ford, announced employment layoffs for 1,000 agency roles and 2,000 salaried positions across the United States, Canada, and India.
“Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century. It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors,” the message states.
The cost-cutting measures taken by Ford are the most recent in a string of initiatives by businesses to slash costs and staff headcount in the face of concerns about a probable recession or economic downturn and inflation that is hanging close to a 40-year high.
The layoffs come less than a month after Farley told analysts that “we absolutely have too many people in certain places, no doubt about it.” Automotive News broke the news of the cuts on Monday.
The cuts are being made across the board at Ford, which earlier this year divided into two business segments to separate its internal combustion engine and electric vehicle businesses.
“There are opportunities to be more efficient and more effective in all the business units and all the functions that support them,” T.R. Reid, a Ford spokesman, told CNBC.
In North America, Ford has 31,000 salaried employees. Ford employed 186 769 people worldwide as of the end of last year, with 90 873, or 48.7%, of those people working in the United States.
Ford is undergoing a huge makeover of the firm termed Ford+ under Farley, who took over as CEO in October 2020. This change includes promises to eliminate $3 billion in structural expenses by 2026 while spending billions to build its electric and commercial vehicle divisions.
“We worked differently than in the past, examining each team’s shifting work statement connected to our Ford+ plan. We are eliminating work, as well as reorganizing and simplifying functions throughout the business,” read the memo to the staff.
In afternoon trade on Monday, Ford’s stock was down almost 5% to $15.10 per share. In 2022, the share price is down by around 27%.