Ford Motor Co. seems to be the latest corporate major to join the ongoing layoffs with plans of cutting 3,200 jobs across Europe, mainly in Germany, reports said quoting Germany’s IG Metall union.
The U.S. auto major also plans to move some product development work to the United States.
The planned workforce reduction is part of the company’s efforts to cut costs to face ongoing macroeconomic conditions amid recession fears. Rising electric vehicle battery material costs are said to be a major issue for Ford, which has set a target of attaining half of global sales from EVs by 2030.
The company recently said it needs to be more competitive as it transitions to EVs, and that shifting to electric vehicle production requires structural changes.
Reuters reported that Ford plans to cut 2,500 jobs in product development and a further 700 in administrative roles, mainly in German locations.
Ford informed the job cut plans to its workers in Cologne site, which employs around 14,000 people, at works council meetings. Further, 3,800 working at a development center in the neighborhood of Merkenich were also informed of the plans.
Ford is in discussions with the German works councils for taking the decision. Meanwhile, the union said it is planning to take action if Ford goes ahead with the proposed cuts.
IG Metall, one of Germany’s largest unions, reportedly said, “If negotiations between the works council and management in coming weeks do not ensure the future of workers, we will join the process. We will not hold back from measures that could seriously impact the company not just in Germany but Europe-wide.”
Ford in June last year had warned of significant job cuts in the near term at its certain European factories as the shift to EV production would require fewer labor hours.
In August last year, Ford cut 3,000 employees and contract workers, while calling its cost structure uncompetitive compared to other carmakers. At the end of 2021, Ford had 183,000 employees.
Meanwhile, Ford CEO Jim Farley in last November had warned that EVs’ production will result in significant job losses, but producing more parts in-house will help to mitigate this impact.
While talking at an auto conference for the Rainbow Push Coalition in Detroit, Farley said EVs require 40 percent lesser workers than for producing cars and trucks powered by petrol.
In December last year, luxury electric vehicle giant Tesla Inc. had told its employees that it halted hiring for the time being and that teams would need to lay some people off in the first quarter of 2023.
Many major US tech firms recently announced job cuts or hiring freeze amid the slowing growth. Alphabet Inc., the parent company of search giant Google, plans about 12,000 job cuts, while Microsoft announced 10,000 job cuts, Amazon 18,000 jobs or about 6% of its workforce, and Facebook parent Meta around 11,000 roles.
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