Thousands of Ford workers working on internal combustion engine (ICE) vehicles may soon be at risk of losing their jobs.
Ford is allegedly preparing to lay off 8,000 of its employees in the coming weeks to boost profits enough to fund its push into the electric vehicle (EV) market, per Bloomberg's sources.
The popular automaker previously announced it would invest $50 billion to develop more EVs until 2026, per CNN.
Ford 8000-Strong Layoff Details
Ford is reportedly considering laying off 8,000 of its employees to improve profits enough to find its EV plans, according to Bloomberg's sources who are familiar with the company's plans.
The layoffs were said to be exclusive to the 31,000 salaried workers in the US, specifically to the newly-created Ford Blue division responsible for producing ICE vehicles and other salaried positions in the company.
This plan has yet to be finalized, and its details could still change in the coming weeks. However, should it go ahead as it is now, it would most likely happen in phases this summer.
The sources have asked Bloomberg to keep their identities anonymous as the discussions regarding the plan are said to be confidential.
Ford's Reason For The Planned Layoffs
You may remember that Ford CEO Jim Farley announced that he is boosting spending on EVs to $50 billion and setting a plan to build 2 million EVs annually by 2026, per Fortune.
To realize his plan, Farley divided the company into two divisions in early March: Ford Blue, which is in charge of developing ICE vehicles, and Ford E, which is dedicated to developing EVs, such as the Ford Mach E and the F150 Lightning, per NPR.
Farley mentioned he decided to split the company into two because he wants its Blue division to be "a profit and cash engine for the entire enterprise" while referring to the Model E's EV operations.
"The funding for that $50 billion, it's all based on our core automotive operations, Farley said in an interview with Bloomberg Television. "That's why we created...Ford Blue, because we need them to be more profitable to fund this."
However, Farley believes that one way for the Blue division to generate cash and profit is to cut staff. He says that the company has "too many people" at a Wolfe Research auto conference in February.
Farley isn't without good reason to believe as much. Ford's management team "firmly believes" that its ICE and battery electric vehicles portfolios are earning less than expected, as evidenced by its shares dropping by 39%.
Ford declined to comment about the sources' information as it was focused on "reshaping" the company to capitalize on the growth of EVs.
Ford Chief Communications Officer Mark Truby mentioned to Bloomberg that Ford leadership has laid out clear targets to lower the company's cost structure to ensure it is streamlined and competitive enough to compete against the best in the automotive industry.
