The job cuts are anticipated to impact all three of Ford’s business units: Ford Blue, Model e, and Ford Pro.

Under the leadership of CEO Jim Farley, Ford has been undergoing a restructuring of its operations for several years as part of its Ford+ plan.

In an effort to restructure its business operations and achieve billions in cost-cutting measures, Ford Motor announced on Monday that it will be implementing layoffs this week, primarily targeting engineering positions in the United States and Canada.

The engineering job cuts are expected to have an impact on all three of Ford’s business units: Ford Blue, which handles traditional internal combustion engine operations; Model e, responsible for electric vehicles; and Ford Pro, which focuses on fleet services.

A company spokesperson declined to disclose the exact number of employees affected. However, in Ford’s most recent quarterly filing in May, the automaker stated that it expected to incur total charges between $1.5 billion and $2 billion in 2023, primarily due to employee separations and supplier settlements. This forecast is compared to $2 billion and $608 million in 2021 and 2022, respectively, related to similar actions.

Over the past few years, Ford has been restructuring its operations under the Ford+ plan led by CEO Jim Farley. The company previously cut 3,000 workers in North America in August and conducted 3,800 layoffs in Europe more recently.

In a first-quarter filing, Ford stated,“We continue to review our global businesses and may take additional restructuring actions where a path to sustained profitability is not feasible when considering the capital allocation required for those businesses.”

CEO Jim Farley has emphasized the need to address Ford's approximately $7 billion cost disadvantage compared to some of its competitors. The company aims to achieve this through efficiency gains and job reductions.

According to a separate public filing, Ford's global employee headcount dropped by approximately 10,000 people to 173,000 in the previous year.

In an emailed statement, Ford stated,“Delivering our Ford+ plan for growth and value creation includes increasing quality, lowering costs, investing in our priorities, and adjusting staffing to match the capabilities we need.” The company reassured that individuals affected by the layoffs would be provided with severance pay, benefits, and significant assistance in finding new career opportunities.

Reports of the most recent layoffs first surfaced late last week, with some contractors being notified that they would no longer be working with the company at that time. Leaders whose teams are affected were informed on Monday afternoon, and employees are expected to be notified throughout the week.

To facilitate the layoffs, the company has instructed affected units to work remotely this week, according to sources familiar with the company’s plans.

Ford is not alone in reducing its workforce as it realigns its business strategy to focus more on electric vehicles. Its competitor, General Motors, has implemented layoffs and conducted an employee buyout program that cost $875 million during the first quarter. Similarly, Stellantis, the maker of Jeep, confirmed in April that it was offering voluntary buyouts to approximately 33,500 U.S. employees as part of its cost-cutting and headcount reduction efforts.