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Ford Motor Company could announce new layoffs as soon as next week — its third round of layoffs within the last year.
Sources informed The Wall Street Journal that this round of layoffs will primarily affect U.S. salaried workers in the gas, electric vehicle, and software divisions of the company.
The company has struggled to curb its spending as it transitions to electric vehicles and reported a $2 billion net loss last year, all while having committed to spending $50 billion through 2026 in developing its EV unit.
The company previously reported that it hopes to ramp up annual EV production to two million by 2026 and expects EVs to represent half of its global volume by 2030.
CEO Jim Farley has acknowledged the company will need to spend “billions” to procure materials that would enable an increase in EV production, and the company has received criticism from previous CEOs about its operational inefficiencies.
Farley acknowledged that the company has struggled operationally on a February earnings call.
“The strength of our products and revenue has masked this dysfunctionality for a long time. It’s not an excuse, but it’s our reality,” he said.
The report followed an earlier announcement from the U.S. Department of Energy that it would loan $9.2 billion to Ford and South Korean battery maker SK — a loan that covers most of the $11.4 billion the companies had jointly pledged to spend on the venture.
The loan is the most significant financial support the federal government has given an automobile company since the Great Financial Crisis and is the biggest loan the Department of Energy has ever made.
Ford was out-earned by its rival General Motors in 2022, despite GM’s lower revenue and smaller workforce, and Ford’s annual costs are still $7 to $8 billion above where they should be relative to rivals, according to the Journal, though Ford did report above-expected revenue in its most recent quarterly earnings report.
The Journal also reported that the company would work to separate its gas-engine business from its EV and software sectors. Its EV sector is predicted to lose $3 billion in operating profit this year.
A Ford spokesperson said in a statement that the layoffs are in line with the company’s future business plans.
“As we have said, part of the ongoing management of our business includes aligning our global staffing to meet future business plans, as well as staying cost competitive as our industry evolves,” he said.