Ford Plans to Cut 8,000 Jobs as It Aims at Market for EVs, Report Says

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Ford Motor

plans to cut thousands of workers to give it a leg up in the race to win a bigger share of the market for electric vehicles, according to a report from Bloomberg.

Cutting your way to EV product leadership seems like a paradox. But the cuts, of up to 8,000 workers, will come from

Ford
’s
traditional internal combustion engine, or ICE, business, the report said. It cited unidentified people familar with the matter who said the cuts were intended to help fund the EV business.

Ford (ticker: F) didn’t immediately respond to a request for comment.

Recently, Ford recently reorganized itself into new business units. It soon will be reporting segment data from its EV business, and its commercial business. It will still report results for Ford Credit.

Cutting costs in the ICE portion of Ford’s business could boost profit margins and cash flow. That cash would help fund the billions in EV investment Ford has planned in coming years.

The company is building new plants and battery capacity. It plans to be selling 2 million EVs a year around the globe by 2026.

The potential cuts don’t come as a complete shock. CEO Jim Farley hinted at a bloated cost structure earlier in 2022.

“We have too many people. We have too much investment. We have too much complexity,” said Farley at the Wolfe Research investment conference in February. “That’s a simple answer. There’s waste.”

Ford stock was up 1.1% in late trading Wednesday. The

S&P 500

and

Dow Jones Industrial Average

rose 0.7% and 0.2%, respectively.

Year to date, Ford stock is down about 39%. Inflation and higher interest rates have investors worried about a recession, which could hit Ford’s volume and profit margins.

Write to Al Root at [email protected]