Ford confirmed that it would lay off 3,000 employees this week, according to a report from the Wall Street Journal. Company leadership sent a letter on Monday, outlining the layoffs to staff. The move is part of an overall effort to slash $3 billion in costs.
In total, 2,000 salaried workers and 1,000 contractors will lose their jobs in the United States and Canada. CNBC obtained the memo, which was issued by CEO Jim Farley and Chairman Bill Ford. In part, the memo says “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,” according to CNBC.
Farley had already laid the groundwork for this layoff with comments to investors earlier this year, stating, “we absolutely have too many people in certain places, no doubt about it.” Ford will cut jobs across both of its business entities, which are now split into electrified (Ford Model e) and gas vehicles (Ford Blue).
Though significant, the cuts represent a small portion of The Blue Oval’s 31,000 salaried workers in North America. The automaker joins Tesla and several other non-automotive companies in cost reduction measures that have seen thousands of jobs cut. Fears of recession and high inflation have created a difficult business environment that led to the layoffs.