Are you worried about the American economy? No one would blame you if you were. After all, we’ve seen a lot of rather scary changes to it over the last couple of years. Gas and oil prices have skyrocketed, rent and housing costs are through the roof, and inflation is hovering at rates our nation hasn’t seen in over 40 years.
As a result, the average American is paying more for just about everything they do, which has brought consumer confidence way down. This means we just aren’t buying as much or are a bit more nervous when it comes to big purchases like vehicles and homes. Of course, it doesn’t help that interest rates are up too.
But it’s not just consumers who are worried. Manufacturers everywhere are showing their concern as well.
Take Ford Motor, for instance.
Like many companies, the automotive giant is looking to cut costs just about everywhere. And yes, that includes cutting personnel.
On Monday, Ford sent out a message to all employees, letting them know that some major changes would be coming to the company. And that means nixing about 3,000 jobs from its global workforce, but mostly in North America, according to CNBC.
According to the message, 2,000 of those positions will be salaried, and the remaining 1,000 will be agency jobs throughout the US, Canada, and India.
The message reads, “Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century. It requires focus, clarity, and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors.”
While the cuts and restructuring are definitely due to fears of a coming recession or economic slowdown due to inflation, these are not the first ones the company has made since bringing CEO Jim Farley on in October 2020.
In fact, the company is transforming into what Farley and Ford Chair Bill Ford call Ford+. This includes plans to cut some $3 billion in structural costs by 2026 as well as putting billions more into expanding both its electric and commercial vehicle lines.
Already, the company has split its operations into two basic units—one for electric engines and the other for internal combustion engine businesses.
As Ford spokesman TR Reid told CNBC, “There are opportunities to be more efficient and more effective in all the business units and all the functions that support them.”
And, as the message says, that means “eliminating work,” “reorganizing and simplifying functions,” examining each shift and team, as well as their work statements. Anything that doesn’t add up to success is likely to get cut.
According to Ford employee records, the company employed 186,769 individuals globally as of the end of last year. About 48.7 percent of those, or 90,873, are located in the US. But the company only employs about 31,000 salaried workers between both the US and Canada.
But as Farley told analysts about a month ago, “we absolutely have too many people in certain places, no doubt about it.” And so, job cuts are needed to make the business thrive.
Unfortunately, it’s just part of how things must be if companies are to survive tough times. You can be sure that Ford is not the only business out there doing the same.
Due to high inflation and the fear that a recession is right around the corner, companies like Meta (the parent company of Facebook), Airbus, JPMorgan, PayPal, Tesla, and Coinbase are just some of the many who have recently announced layoffs, job freezes, or job cuts.
Now, inflation has seemed to plateau a bit in the last month, which brings hope that things will begin to get better. But it might not be before the government is forced to yet again raise interest rates and the housing market takes a dive, as it already seems to be. In fact, many financial experts say a recession is already here.
And that means more job cuts should be expected.