Ford will cut 3,800 jobs in Europe as the company restructures to focus on developing its all-electric fleet, the company announced Tuesday.
The layoffs and restructuring are part of the company’s response to “rapidly changing market conditions” and increased competition in the electric vehicle industry, Ford said in a press release. The company missed its earnings expectations by $1.1 billion in the fourth quarter of 2022 and was down $11 billion from the same time the year prior, according to CNBC. (RELATED: Here’s How Elon Musk Started An Electric Vehicle Price War)
“These are difficult decisions, not taken lightly,” said Martin Sander, general manager of Ford Model e in Europe, in the company’s announcement. “We recognize the uncertainty it creates for our team, and I assure them we will be offering them our full support in the months ahead. We will engage in consultations with our social partners so we can move forward together on building a thriving future for our business in Europe.”
The company is investing $50 billion into its electric vehicle lineup and its plans to make its European fleet all-electric by 2035 are unaltered, Ford announced. Chief Financial Officer John Lawler said in early February that the company would need to be “very aggressive” in cutting costs to compensate for an anticipated $5 billion increase in operating costs in 2023, Reuters reported.
WASHINGTON, DC – JANUARY 19: A Ford Mustang Mach-E all-electric SUV is on display during a preview at the Washington, D.C. Auto Show at Walter E. Washington Convention Center on January 19, 2023 in Washington, DC. (Photo by Alex Wong/Getty Images)
The proposed cuts will eliminate roughly one in nine Ford employees in Europe, and represent the first major cuts in the region since 2019 and 2020, when the company was seeking to boost profits before the pandemic hit, Reuters reported. The company’s electric vehicle arm is not expected to be profitable until 2025.
Electric vehicle sales surged last year, both in the U.S. and abroad, even as new car sales dipped slightly in 2022.
President Joe Biden’s signature climate bill, the Inflation Reduction Act, offers significant tax breaks for companies to build electric vehicles and their batteries in the United States, in a bid to break China’s dominating influence on the electric vehicle market. The plan, however, is already projected to cost at least $136 billion, more than four times its initial estimated cost of roughly $30.6 billion, after a rash of companies announced manufacturing investments.
Ford did not immediately respond to a Daily Caller News Foundation request for comment.
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