Ford has announced plans to cut 3,800 product development and administrative jobs in Europe over the next three years due to rising costs and the need to shift production to electric vehicles. The job reductions amount to 11 percent of the automaker’s European workforce, with Germany and the UK being the most affected. About 2,300 jobs will be cut at Merkenich-Cologne and Aachen sites in Germany, 1,300 in the UK and 200 in the rest of Europe. Ford plans to achieve the reductions through voluntary separation programs. The company is also discontinuing the Fiesta small car and the Focus in 2025 at its plants in Germany and is in talks with potential buyers of the plant, including China’s BYD.
Ford is taking drastic measures to remain competitive and profitable in the face of rising costs, increasing demand for electric vehicles, and economic and geopolitical headwinds. The company is targeting $3 billion in annualized savings while investing more than $50 billion in EVs through 2026, and is aiming to make its passenger car lineup in Europe all-electric by 2030. Ford is also in the process of launching its first all-electric vehicle in Europe this year, built on VW Group’s MEB platform in Cologne, and is considering bringing a Ford platform to Europe, possibly to its plant in Valencia, Spain.
The job cuts come as Ford is trying to become more efficient and productive in its operations. Chief Financial Officer John Lawler has said that the company will be “very aggressive” in reducing expenses in manufacturing and supply chain operations, and that the productivity of engineers in Europe is 25 to 30 percent lower than it should be. Ford is also expecting its EV business to not be profitable until the next-generation models begin production in 2025.
The drastic job cuts are a sign of the changing landscape of the automotive industry, as automakers shift to electric vehicles and try to remain competitive and profitable in the face of rising costs, economic and geopolitical headwinds, and increasing demand for electric vehicles. Ford is taking bold steps to ensure that it can remain a leader in the industry, and while the job cuts are unfortunate, they are necessary to ensure the company’s future success.