Automaker Ford on Tuesday said it intends to cut 3,800 jobs in Europe over the next three years to adopt a “leaner” structure as it focuses on electric vehicle production.
The company plans to slash 2,300 jobs in production development and administration in Germany, 1,300 in the U.K. and 200 posts elsewhere in Europe. It said it will retain roughly 3,400 engineering roles in Europe, focused on vehicle design and development, alongside the creation of linked services.
The automaker said it employs approximately 34,000 people in Europe.
The overhaul will not affect Ford’s aim to offer an all-electric fleet by 2035. The company expects production of its first European-built electric passenger vehicle to start later this year.
“These are difficult decisions, not taken lightly. We recognize the uncertainty it creates for our team, and I assure them we will be offering them our full support in the months ahead,” said Martin Sander, general manager of Ford Model e in Europe.
“Paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build, and sell Ford vehicles. This will impact the organizational structure, talent, and skills we will need in the future.”
The Ford restructure comes as the company picks itself up from the ashes of brutal fourth-quarter results that were down $11 billion on the same period of last year and came in $1.1 billion short of the automaker’s own guidance. Ford Chief Financial Officer John Lawler attributed the company’s depressed earnings largely to execution and supply chain management hurdles, as the vehicle producer fell short of expected sales by 100,000 units last year.
“We have to change our cost profile,” Farley told CNBC on Feb. 3. “We know what we have to go after. I’d love to give you all the metrics and all the specific gaps we see. But you know, whether it’s absenteeism, the number of sequencing centers, the number of wiring harnesses we have, we know what it is.”
At the time, Farley signaled that the solution to Ford’s drive toward efficiency was not simply to cut jobs:
“There are things we could do in the short term, but I don’t want to just make the output the cuts without redesigning the work. This has to be sustainable and that’s how we’re thinking about it nowadays,” he said.
Automakers have been locked in a tight race to capture market share as they wheel in new and competitively priced electric vehicles.
During his fourth-quarter results presentation, Farley noted that Ford’s EV business was not yet profitable — a year after separating it from the company’s internal combustion engine business and upping its expected investment in EVs and other technologies to $50 billion by 2026.
The company on Jan. 30 announced plans to raise output and cut prices of its electric Mustang Mach-E crossover, within weeks of rival Tesla trimming prices for U.S.-sold models across the board and for its Model 3 and the Model Y within Europe, CNBC reports.
