Ford to Cut 4,000 Jobs in Europe Amid Economic Struggles and Declining EV Sales

Ford Motor Company is set to reduce its workforce by 4,000 employees across Europe and the U.K. by the end of 2027. The decision is attributed to prevailing economic challenges, intensified competition, and disappointing sales in the electric vehicle (EV) sector.

On Wednesday, Ford announced that the majority of the layoffs will take place in Germany, and they will occur in collaboration with employee representatives. Specifically, the cuts include 2,900 positions in Germany, 800 in the U.K., and 300 across other European Union nations. With a total workforce of 28,000 in Europe and 174,000 globally, these reductions mark a significant shift for the company.

In a statement, Ford highlighted the ongoing disruption in the global automotive industry as it transitions towards electrified mobility. This transformation is particularly challenging in Europe where automakers are battling substantial economic headwinds while also navigating the disparity between strict CO2 regulations and the current consumer demand for electric vehicles.

Automakers in Europe face strict requirements to sell enough electric vehicles to comply with new, lower carbon dioxide emissions limits set for 2025, with a long-term goal of zero emissions by 2035, leading to the end of most internal combustion engine vehicles.

However, sales of electric vehicles have been disappointing as inflation concerns have deterred consumer spending, compounded by Germany’s decision to eliminate government purchase incentives for EVs. In the first nine months of the year, sales of electric vehicles dropped by 5.8% in an overall contracting car market. Additionally, Ford is experiencing heightened competition from Chinese-made electric vehicles.

The automaker also plans to implement reduced working hours at its Cologne facility, which produces the Capri and Explorer electric models.

In the first nine months of the year, Ford's sales in Europe plummeted by 15.3% compared to the previous year, resulting in a market share decline from 3.5% to 3%. The company's net profit dropped by 26% to $892 million in the third quarter, impacted by $1 billion in charges due to the cancellation of a three-row electric SUV, alongside increased warranty and other costs.

As Ford prepares to celebrate its 100th anniversary in Germany next year, with a Cologne plant operational since 1931, it joins other automakers like Volkswagen in addressing workforce reductions amid these industry challenges. Volkswagen has indicated it may consider closing up to three of its German facilities.

In a recent letter to the German government, Ford's vice chairman and CFO, John Lawler, reaffirmed the company's commitment to climate initiatives while calling for essential policy actions to support the market and the industry's future. "What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility," Lawler remarked, emphasizing the need for public investment in charging infrastructure, consumer incentives for electrified vehicle adoption, and increased flexibility in CO2 compliance targets.