Ford to cut jobs in the US, Canada in a bid to trim costs

By Aishwarya Nair

(Reuters) -Ford Motor Co said on Tuesday it will begin layoffs this week, impacting mostly engineering jobs in the U.S. and Canada, as part of the Detroit automaker’s move to exit unprofitable locations and cut headcount.

The development comes after the company said in May it expects to take up restructuring charges between $1.5 billion and $2 billion in 2023.

The automaker did not specify the number of roles to be affected by the move. “People affected by the changes will be offered severance pay, benefits,” Ford said, adding the layoffs are not restricted to engineering roles.

“This is related to the Ford+ growth plan we introduced in 2021,” the company said in an emailed statement.

“Delivering on the plan includes adjusting staffing to match focused priorities and ambitions while raising quality and lowering costs,” Ford added.

The automaker’s latest effort to streamline operations comes after peers Stellantis NV and General Motors (NYSE:) said they were offering employee buyouts.

CNBC reported on Monday job cuts are expected to affect all three of Ford’s business units – Ford Blue, Model e, and Ford Pro. The Wall Street Journal reported last week the automaker was preparing for a new round of layoffs for its salaried workers in the United States.

In February, Ford also detailed plans to eliminate 3,800 product development and administration jobs in Europe in the next three years.

While price hikes and strong demand for new vehicles have helped automakers sail through inflationary headwinds to some extent, the high cost of raw materials continues to remain a challenge.