Ford Makes Engineering Layoffs in U.S. and Canada as Mammoth Restructuring Phase Continues
Key takeaways
- Ford is conducting another layoffs round which is said to affect its engineering teams in the U.S. and Canada
- The stock was down 0.6% in pre-market trading on Friday at the news, but has since gained
- The news of a $9.2 billion loan headed to Ford’s EV joint venture could have helped the share price
Car manufacturing titan Ford has confirmed it’s making its second round of layoffs this year, with its U.S. and Canadian engineering teams on the chopping block. Wall Street wasn’t impressed with the announcement initially, though the stock price has since recovered. We’ve got the details below.
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What’s happening at Ford?
Ford, one of the biggest car companies in the world, has confirmed it’s conducting further layoffs this week. The cuts are said to primarily impact Ford’s engineering teams in the U.S. and Canada, with positions in the gas-engine vehicle unit and electric vehicles and software teams getting the axe. It’s currently unknown how many roles are affected.
Ford CEO Jim Farley has been leading the charge with Ford’s restructuring, which has resulted in mass layoffs as the company looks for efficiencies. Last August, it slashed 3,000 positions in the U.S. and this year, it reduced its European headcount by 3,800. The company has around 173,000 workers globally.
The car giant plans to make $3 billion in cost savings by 2025. Ford’s Q1 earnings beat confirmed the company expected to spend between $1.5 billion and $2 billion on charges “primarily attributable to employee separations and supplier settlements”.
What was the market reaction?
Ford shares slipped 0.6% in Friday’s premarket trading at the news, though the share prices has gained since and is currently up 2.13% on Wednesday to reach $14.41. The stock is up 23.37% since the start of the year.
What might have helped the stock recover was news of the $9.2 billion government loan Ford is receiving to help the car manufacturer faster transition to EVs. The loan is officially for BlueOval SK, which is the battery manufacturing joint venture between Ford and EV battery maker SK On.
The loan will be used to build three battery plants across the U.S. that will eventually produce enough gigawatt hours of EV batteries to power 1.5 million new Ford EVs a year.
The bottom line
Like many other companies, Ford has to make difficult headcount decisions as it pursues cost-cutting measures and accelerates its move towards electric vehicles. Given the restructuring is a multi-year situation, it may not be the last of mass layoffs from the company.
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