Skip to main content

No one wants to talk about enforcing layoffs in the automotive industry. But budget cuts and stalled production have been happening throughout the car-making landscape for the last few years. From pandemic reactions and plant shuttering to supply chain issues and microchip shortages, the challenges all automakers face continue to drive change. Ford’s new buyout plan, includes a layoff of roughly 3,000 workers, demonstrating just how volatile the market can be.

But the recent Ford announcement regarding plant layoffs may suggest a few other contributing factors. And there’s more to uncover for those who may be facing unemployment soon. Here’s the latest about Ford’s new buyout plan, the 3,000 employees being laid off, and other auto brands facing similar challenges.

Ford is laying off 3,000 salaried workers

A Ford logo, whom just initiated a new buyout plan.
Ford logo | Getty Images

Ford’s new buyout plan has been in the works and has been clear for some time that potential cuts were coming. Ford Authority shared the details, including statements from Ford’s CEO, Jim Farley, who addressed employees via company video, disputing previous rumors.

But ultimately, Ford did levy those rumored cuts, and 3,000 employees were laid off. The staff reductions affected salaried positions across United States plants and those in India and Canada. More official details and announcements are expected soon regarding other aspects of Ford’s new buyout plan.

The Ford severance offering

Some details regarding the severance packages for employees affected by the layoff are official. The packages will vary based on the individual’s years of service. For example, some staff members are receiving nine months of pay, distributed in a lump sum.

More tenured employees with 10 years of service are receiving four months of pay, with an additional six months of medical benefits. Anyone working with Ford Motor Company for five years or less is expected to receive one month’s pay as a lump sum payout.

There are medical coverage extensions available, again based upon years of service. And anyone nearing retirement age who may be affected by the Ford layoffs will have an option to accept the severance and still collect retirement pensions.

The catch for anyone impacted by Ford’s new buyout plan layoffs is that a waiver must be executed within 45 calendar days from the date of layoff notification. There will also be a seven to 15-day window of opportunity for staff to change their minds about accepting their offered severance.

Other companies facing similar tough decisions

Layoffs aren’t just a Ford problem. The industry continues to readjust and restructure to account for the economic impacts of chip shortages and supply chain strains. From Stellantis to Tesla and Rivian, layoff discussions are always on the table, as Autoblog reports.

Part of Ford’s decision to lay off thousands, as Business Insider reported, involves the transition to electric vehicles. Ford continues to “slash” jobs, and a “tidal wave of layoffs will likely rock the industry” as the shift to electric vehicle production continues. Ford may just be the first to announce restructuring. But many other automakers are facing the similar workforce and budget challenges.

EVs require much less manual labor and varied skill sets than traditional gas-powered vehicles require during production. Volkswagen and Ford estimated electric vehicles require 30% less labor. Other data points to 40% less labor needed for producing EV motors and batteries than engine and transmission production.

The Economic Policy Institute predicts the United States could cut back more than 75,000 auto worker jobs by 2030 alone should EV sales reach 50% of domestic sales. That could also translate to as many as 275,000 auto workers out of work by 2040.

For now, it may be Ford’s new buyout plan that is driving 3,000 employees to be laid off across three countries. But autoworkers may want to brace for more impacts as the industry continues shifting and both global and domestic brands reinvent their plans to remain successful.


Jim Farley Worries About the Ford Explorer EV Upsetting Fans