Eightthousand layoffs, a battery revolution, Ford saved $3billion for transformation

One week before the release of the second quarter financial report, Reuters and other foreign media have heard a lot of important strategic news.

The first news is that Ford is preparing to lay off staff, and it plans to lay off as many as 8000 people in the next few weeks. Insiders close to Ford revealed that the purpose of this massive layoff is to improve profits and provide more funds for transformation, but the specific details have not been finalized.

Another message is that the battery strategy will be adjusted. On Thursday, Ford announced that it would import low-cost lithium iron batteries from Ningde times to carry electric pickup trucks and SUVs in North America. Subsequently, the two companies will also reach a series of cooperation agreements to ensure the supply of batteries and raw materials in the next decade.

It is reported that the layoff department is mainly Ford blue, which is responsible for the fuel vehicle business, but employees in other departments will also be affected. Although there are still many variables in the details of layoffs, once the plan of layoffs is implemented, it will be an important part of Ford's cost reduction goal of $3billion in 2026.

Cut costs and cut 8000 jobs

According to people familiar with the matter, because the layoffs cover a wide range, they are likely to be gradually reduced in stages and batches, and are mainly concentrated in the United States. According to the number of about 31000 employees in the United States, more than 8000 layoffs have accounted for a quarter of the total employees in the region.

A source close to Ford also told the North American media that the layoffs involved many types of jobs, including financial, human resources, legal and business functions, in addition to automotive research and development and production.

The original intention of the leader Jim Farley is to rethink the transformation goals and business priorities of the new four modernizations era and find a more efficient way of working.

Some insiders also said that there have been misunderstandings about Ford's business split. Many people believe that Ford blue is a more efficient and cost-effective department within the company, but this is not the case.

For example, in the view of Ford executives, the after-sales and warranty costs of the company's cars are high, and higher than most of its competitors in Detroit, the United States, and even worldwide. Because of this, Ford focused on layoffs in the Ford blue department. In the view of Ford employees, such a decision is not unexpected.

According to the plan, Ford will release the second quarter financial report data on July 27. At that time, the company will also announce the latest strategic decisions at the communication meeting. No matter how the layoff plan is finalized, cost reduction and efficiency increase will become the main theme of Ford's operation in the next few years.

In fact, with the U.S. economy entering a recession cycle, Ford is not the only U.S. automaker to choose layoffs this year.

Since the 1960s, when the U.S. inflation level exceeded 5%, most of the ensuing economic recession, and even the most profound economic crisis. But by May this year, inflation in the United States had soared to 8.5%, the worst inflation in the past 40 years, and became the real source of economic weakness.

In June this year, Tesla was exposed to plan to cut 10% of its staff. Then musk himself admitted this rumor. According to the size of the company's nearly 100000 global employees, this means that nearly 10000 people will lose their jobs.

In the same month, Argo AI, a self driving start-up invested by Ford and Volkswagen, announced layoffs of about 150 people. Although not many people were affected, considering that the company currently has only about 2000 employees worldwide, the layoffs are not small.

A week ago, rivian CEO RJ scaringe said in an email to employees that the management planned to discuss the specific matters of layoffs at the staff meeting.

According to people familiar with the matter, this round of layoffs of rivian will focus on non manufacturing jobs, including teams with high repetition of functions and easy to be replaced. The dismissed employees will receive formal notice of dismissal in the next few weeks.