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The trend of massive layoffs at large U.S. companies is spreading from the tech industry to car manufacturing. This week, Ford announced plans to lay off "hundreds of salaried workers," most of whom are engineers.
As the company begins to transition towards electric vehicles (EVs) it needs to increase profits and reduce operating costs which have led to large-scale cutbacks.
According to Ford, the layoffs will affect engineers in traditional combustion engine models, EVs, and commercial vehicles and will see hundreds of employees lose their jobs. All of this despite CEO Jim Farley stating earlier this year that Ford would need 25% more engineers than its competitors to produce its new EVs.
As for the EV transition, the company expects to lose some $3 billion in 2023 on its EV business, however, it is hoping for 8 percent returns on battery-powered models by the end of 2026 by which point it intends to be manufacturing 2 million EVs per year.
Ford spokesman T.R. Reid said, "We're not cost competitive. We have specific priorities and ambitions that have implications for skills, assignments and staffing needs. These changes are consistent with that. They'll make us cost-effective."
The company has been forced to rethink its costs after Elon Musk cut Tesla prices on its top-selling models at the beginning of the year, which has increased demand for the cars thereby allowing Tesla to remain at the top of the EV market.
Rethinking costs isn't the only effect that Tesla has had on Ford's strategy. Ford announced a few weeks ago that it would be changing its charging standards to use Tesla's technology which will allow its consumers to have access to Tesla's 12,000 superchargers.
At the time of the announcement of the switch to the Tesla charging standards, Farley said, "This is great news for our customers who will have unprecedented access to the largest network of fast chargers in the U.S. and Canada with 12,000+ Tesla Superchargers plus 10,000+ fast-chargers already in the BlueOval Charge Network."
"Widespread access to fast-charging is absolutely vital to our growth as an EV brand, and this breakthrough agreement comes as we are ramping up production of our popular Mustang Mach-E and F-150 Lightning, and preparing to launch a series of next-generation EVs starting in 2025," he concluded.
The question now is how many engineers will be left to design the next-generation EVs for 2025 after all the layoffs?
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