Ford looking to cut 8,000 jobs to boost electric vehicle funding

Ford Motor is looking to eliminate as many as 8,000 jobs in the coming weeks as the company tries to boost its profits to push more funding towards electric vehicles, Bloomberg reported, citing sources. The layoffs will take place in the company's newly created Ford Blue unit which is responsible for producing internal combustion engine vehicles. However, the layoff plan has yet not been formalized.

This move is a significant step towards Ford CEO Jim Farley's plan to cut $3 billion of costs by 2026 while transforming Ford Blue into “the profit and cash engine for the entire enterprise." Earlier this year, in March, Farley radically restructured Ford, splitting it into two by creating the ‘Model e’ unit to scale up EV offerings and ‘Ford Blue’ unit to focus on combustion engine models such as the Bronco sport-utility vehicle.

Ford is expected to make the job cuts among its salaried ranks in a variety of operational functions, the report said. The layoffs might not take place in one go and might be executed in phases, but these are likely to begin this summer. Ford employs about 31,000 salaried workers in the US, where the bulk of the cuts are expected.

In an interview, Farley said that cutting staff is a key to boosting profits, which have been affected in recent times with the electric Mustang Mach-E and other plug-in models amid rising commodity and warranty costs. The company's shares have rolled down 39% this year through Tuesday, worse than the broader market, amid inflation fears and supply-chain snarls roiling the automotive industry.

In March, Ford increased its spending on EVs to $50 billion and set a plan to build two million battery-electric vehicles annually by 2026, after selling just 27,140 in the US last year. Last month, Ford’s EV sales rose 76.6% from a year earlier as it rolled out the hot new electric F-150 Lightning pickup.