On Wednesday, Bloomberg reported that Ford
The cutbacks likely spring from the Blue Oval's bid to cut operational costs by $3 billion by 2026, the same year the company aims to roll out 2 million battery-powered vehicles.
According to Bloomberg's sources, trimming costs at Ford's legacy internal combustion division, known as Ford Blue, will be the primary focus of the layoffs, although details are not final. The pink slips are set to come out shortly, sometime during the summer, and will likely come in phases.
On Thursday, The Detroit Free Press reported that Ford CEO Jim Farley sent a video to employees addressing the reporting. In the video, he did not deny the cutbacks and emphasized his continued goal to increase efficiency at the company.
Ford Chief Communications Officer Mark Truby emphasized similar themes in a statement to Bloomberg, although he did not comment on the layoffs specifically.
"We have laid out clear targets to lower our cost structure to ensure we are lean and fully competitive with the best in the industry," he said.
In March, Mr. Farley made clear his plans to turn Ford Blue into the "profit and cash engine for the entire enterprise" meanwhile, in February, Farley not-so-subtly broadcasted hints of potential staff cutbacks.
"We have too many people," Farley said at a Wolfe Research auto conference, "This management team firmly believes that our ICE and BEV portfolios are under-earning."
As part of Farley's plan, in March, Ford dramatically separated its internal combustion and battery-powered divisions in a bid to improve operational efficiency. Concurrently, Ford announced up to 50 billion investment over the next five years to accelerate its electrification efforts.
Farley hinted at the time that much of this investment would come from cost savings found through cutbacks at its legacy ICE division. "That's why we created a separate group called Ford Blue, because we need them to be more profitable to fund this," he said during an interview with Bloomberg Television.
Still, the cutbacks come at a notably tough time for Ford. The automaker hemorrhaged $3.1 billion in the first quarter owing to a decline in fortunes at EV company Rivian
In the meantime, Ford's EV ambitions remain a gamble. It sold 27,140 battery-powered vehicles last year in contrast to the 2 million it plans to produce in 2026.
Still, EV sales at Ford have jumped 76.6% year over year, owing to the rollout of its hot-ticket Mustang Mach-Es and electrified F-150 Lightnings. Still, rising material costs and strained supply chains have crimped profitability, particularly in the case of the Mach-E.
Ford has said it is rapidly revamping its electric vehicles to improve profitability, including introducing more cost-effective batteries.
By 2023, or next year, the company says it will have enough production online to produce 600,000 batteries.
