Ford will reportedly slash a quarter of its workforce to fuel EV expansion

Illustration by Alex Castro / The Verge

In the midst of a shift to electric vehicles, Ford is looking to cut its workforce. About 25% of the Blue Oval's workforce in the US will be laid off by the end of the year, according to a recent report.

The cuts will come from Ford Blue. Ford split itself into two entities, with Ford Blue covering ICE vehicles and Ford Model E focused on electric vehicles and software. The revenue that would be generated by Ford Blue would be used to develop new and innovative products.

Ford Blue will have to make more money with less employees. As soon as this summer, the cuts are likely to start in phases. The majority of the cuts are expected to fall in Ford's US workforce.

According to the Detroit Free Press, Jim Farley sent a video message to employees Thursday morning, in which he didn't deny that layoffs were coming and reiterated the goal of reducing operational costs.

T.R.Reid, Ford's director of corporate and public policy communications, wouldn't discuss what he called speculation about the company.

The transformation plan we call Ford+ will include leading in the disruptive and exciting new era of connected, electric vehicles, according to an email from the CEO. All of our automotive business units are being restructured. We have laid out clear targets for improving our cost structure so that we are lean and competitive with the best.

Photo by Andrew Hawkins / The Verge

Ford plans to invest $50 billion on electric vehicles. Ford Blue must be a profit and cash engine for the entire enterprise according to the man who announced it.

It has been difficult to make profits in the auto industry. The value of Ford's stake in Rivian plummeted in the first quarter of 2022, causing the company to lose $3.1 billion. In the first quarter of the year, the company's operating profit was $3.9 billion.

Ford believes that cutting staff can boost profits. The hottest selling vehicles are struggling to meet their own margins due to rising material costs. The company said it was re-engineering its vehicles on the fly to increase profits.

The company plans to have enough battery supply to support the production of 270,000 Mustang Mach-Es, 150,000 Transit EV, 150,000 F-150 Lightnings, and 30,000 units of a mystery all-new SUV that will be released in Europe.