Ford Layoffs: Automaker To Slash 4,000 Jobs In Europe. Know Why

Ford's announcement follows similar moves by Volkswagen, which recently revealed plans to cut employee pay by 10 per cent and close at least three factories in Germany

Ford Layoffs: The job cuts, primarily targeting Germany and the United Kingdom, are subject to consultation with labor unions.

Source : Ford Motor Company

Ford has announced plans to eliminate nearly 4,000 jobs across Europe by the end of 2027, amounting to about 14 per cent of its regional workforce. The move comes as the automaker grapples with waning demand for electric vehicles (EVs) and mounting pressure from Chinese competitors.

The job cuts, primarily targeting Germany and the United Kingdom, are subject to consultation with labor unions. "The global auto industry continues to be in a period of disruption, especially in Europe, where the industry faces unprecedented competitive, regulatory, and economic headwinds," Ford stated.

Dave Johnston, Ford's European vice-president for transformation and partnerships, noted the necessity of the measures, saying, "It is critical to take difficult but decisive action to ensure Ford's future competitiveness in Europe."

Challenges for Automakers in Europe

Ford's decision underscores the broader challenges facing global car manufacturers. The company has faced significant financial losses in its European passenger vehicle segment in recent years. Competitive pricing pressures have forced automakers like Ford to slash EV prices, further impacting profitability.

The automaker also confirmed adjustments to the production of its Explorer and Capri models in Europe, citing weak economic conditions and lower-than-expected demand for electric cars. This will result in reduced working hours for staff.

Call for Policy Support

John Lawler, Ford's chief financial officer, recently urged the German government to take decisive action to support automakers. In a letter, Lawler called for public investments in EV charging infrastructure, incentives to boost consumer adoption of electrified vehicles, and regulatory flexibility to improve cost competitiveness.

"What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility," Lawler wrote, highlighting the need for stronger government backing.

Broader Industry Impact

Ford's announcement follows similar moves by Volkswagen, which recently revealed plans to cut employee pay by 10 per cent and close at least three factories in Germany. The company aims to safeguard jobs amid a sluggish European car market and declining market share in China.

Earlier on Wednesday, Volkswagen employees proposed forfeiting €1.5 billion ($1.6 billion) in pay increases, provided executives commit to keeping factories open and reducing their bonuses. Both companies’ actions reflect the growing struggles of European automakers, as they face fierce competition from Chinese EV makers and contend with economic uncertainty in the region.