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Ford is laying off thousands of employees, and here’s the memo explaining the change

Ford is laying off thousands of employees, and here’s the memo explaining the change

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The cuts primarily affect staff in the US, Canada, and India

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The F150 Lightning on a gravel road
Ford’s F-150 Lightning
Photo by Vjeran Pavic / The Verge

Ford is laying off about 3,000 employees and contract workers, with the cuts primarily affecting staff in the US, Canada, and India, The Wall Street Journal reports. Chairman Bill Ford and CEO Jim Farley sent a memo on Monday informing staff of the layoffs, with affected workers being told later this week.

“Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century,” Ford and Farley said in the memo, which we have included at the bottom of this article. “It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors.”

About 2,000 salaried jobs and 1,000 agency (or contract worker) jobs will be affected. It’s unclear exactly how the cuts may be spread across Ford Blue, which manages its internal combustion engine (ICE) vehicles, and Ford Model E, which manages its electric vehicles (EVs). Spokesperson T.R. Reid tells The Verge that a larger number of the cuts impact Ford Blue because that’s proportionally a bigger part of the company’s business, but declined to provide a specific number.

Reports from July indicated that Ford was planning to lay off staff. At the time, Bloomberg reported that the company was getting ready to cut as many as 8,000 workers and that Ford Blue would be affected.

Ford created Ford Blue and Ford Model E earlier this year; the company said in its announcement of the divisions that it would continue to build out its ICE vehicle portfolio with Ford Blue to “drive growth and profitability,” while Ford Model E will “accelerate innovation and delivery of breakthrough electric vehicles at scale.”

Ford isn’t the only automotive company to lay off employees in recent weeks. Rivian laid off 6 percent of its staff, Ford-backed startup Argo AI laid off about 150 employees, and Tesla laid off workers who helped train its Autopilot AI system.

Here is the memo sent to staff from Ford and Farley:

Ford Team,

As you know, we are in the midst of a significant transformation of our company. Our industry and the business environment in which we operate are changing with breathtaking speed.

We have an opportunity to lead this exciting new era of connected and electric vehicles; create the most growth and value for Ford and our stakeholders since we scaled the Model T; and continue to make a positive difference in our customers’ lives and on society at large.

Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century. It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors.

We committed to sharing information as decisions are made along the way. As we tackle all aspects of costs – from materials to those related to quality – we are informing some Ford teammates this week in the U.S., Canada and at FBS in India, that their positions are being eliminated. Overall, we are reducing our salaried workforce by about 2,000, as well as reducing agency personnel by about 1,000. These actions follow significant restructuring in Ford operations outside of North America over the past couple of years.

We worked differently than in the past, examining each team’s shifting work statement connected to our Ford+ plan. We are eliminating work, as well as reorganizing and simplifying functions throughout the business. You will hear more specifics from the leaders of your area of the business later this week.

None of this changes the fact that this is a difficult and emotional time. The people leaving the company this week are friends and coworkers and we want to thank them for all they have contributed to Ford. We have a duty to care for and support those affected – and we will live up to this duty – providing not only benefits but significant help to find new career opportunities.

Thank you for all you do for Ford. Please continue to support each other, including colleagues who are leaving the company, as we build a strong and sustainable future.

Bill and Jim

Update August 22nd, 4:26PM ET: Added memo sent to employees.