About 3,000 white-collar workers at Ford Motor Co., mainly in North America and India, will lose their jobs as the company cuts costs to accelerate its transition to electric vehicles.
The automaker made the announcement on Monday in a companywide email, saying 2,000 full-time salaried workers would be laid off, along with another 1,000 contract workers.
Executive Chairman Bill Ford and CEO Jim Farley said in the email to employees that Ford will provide workers with severance pay and significant help in finding new jobs. They also wrote that Ford has a chance to lead the new era of connected and electric vehicles.
Costly transition to electric vehicles
Farley has said repeatedly that the company's global work force of 182,000 is too large, and it needs to cut costs and simplify processes so it can move faster as it transitions to electric vehicles.
The automaker has previously said it plans to spend $50 billion (€50.4 billion) on electric vehicle production by 2026. Ford has also said that it has a target of cutting $3 billion in annual internal combustion vehicle structural costs.
"We are eliminating work, as well as reorganizing and simplifying functions throughout the business," the company leaders wrote in the email. They also mentioned that Ford's cost structure wasn't competitive with those of General Motors, Stellantis and Tesla.
The cuts may not be over. Company spokesman T.R. Reid said Ford will continue to change with the industry and more job losses are possible.
Transformation in auto industry
The job losses come at a time of unprecedented change in the auto industry, which has thrived on sales of petroleum-powered vehicles for over 100 years. Governments around the world are pushing to phase out internal combustion engine cars to mitigate the effects of climate change.
Ford has said it plans for half of its global production to be electric vehicles by 2030.