Ford plans up to 8,000 job cuts to fund electric vehicle investment

Ford Motor Co. is preparing to cut up to 8,000 jobs in the coming weeks as the automaker tries to boost profits to fund its push into the electric vehicle market, according to Bloomberg, citing people with knowledge of the matter.

The cuts will be made at the newly formed Ford Blue unit responsible for producing internal combustion engine vehicles, as well as other positions at the company, said the sources, who spoke on condition of anonymity. The plan has not yet been finalized and details may still change.

The move would mark a major step in CEO Jim Farley’s plan to cut costs by $3 billion by 2026. He has said he wants to turn Ford Blue into a “profit and liquidity engine for the entire business.” . In March, Farley radically restructured Ford, splitting its automaker in two, creating the “Model e” unit to upgrade its electric vehicle offerings and the “Ford Blue” unit to focus on traditional gasoline-powered vehicles.

The job cuts may be phased in but are likely to begin this summer, the sources said. Ford employs about 31,000 workers in the US, where most of the cuts are expected.

Ford declined to comment on potential job cuts, saying it is focused on restructuring the organization to take advantage of the growth of electric vehicles. “Along with this, we have set clear targets to reduce our costs to ensure we are fully competitive with the best in the industry,” chief communications officer Mark Truby said in a statement.

Farley has said that downsizing is key to boosting profits.

Ford’s stock has fallen 39% this year through Tuesday, amid inflation fears and supply chain disruptions hitting the auto industry.

In March, Farley boosted spending on electric vehicles to $50 billion and set a plan to build 2 million electric vehicles a year by 2026, after selling just 27,140 in the U.S. last year. Last month, Ford’s electric vehicle sales were up 76.6% from a year earlier.