Ford Motor Co. announced on Monday, August 22 that it would cut 3,000 jobs, most of them in the United States. According to a company-wide memo from Ford Executive Chair Bill Ford and CEO Jim Farley, the cuts are meant to reduce costs as the company reorganizes around electric vehicles.
The cuts will see Ford let go of 2,000 salaried workers and 1,000 agency employees in the United States, Canada and India, according to the memo first reported by Automotive News.
In the memo, Ford executives connected the reorganization to the plan for Ford to divide into three segments for commercial, electric, and internal-combustion products and thanked those who were losing their jobs “for all they have contributed to Ford.”
Ford spokesperson Mark Truby revealed that “a significant percentage” of the cuts will be in Michigan due to the company’s presence there. Truby did however deny that the layoffs have anything to do with fears of a recession, and noted that the 3,000 jobs cut is less than the 6,200 jobs it announced it would create in June and also less than the 3,200 jobs of that number Ford said it would add in its home state.
Truby also pointed out that the type of jobs that would be lost were not the same as the new hires announced two months ago: “The jobs we’re talking about today are white-collar,” Truby told the Free Press.
According to Truby, Ford currently hopes to decrease its structural costs by about $3 billion over the next few years of its reorganization, but that it was highly unlikely that all the savings could be achieved simply by cutting jobs.