Ford is the latest company to announce its second quarter (Q2) earnings for 2022.
The car manufacturer reported a 20% increase in profit and a 35% growth in revenue to $40.2 billion, which includes $667 million in net income.
This revenue increase was attributed to higher prices, as well as more sales – Ford sold one million vehicles this quarter, compared to 764,000 in Q2 2021.
Demand for electric vehicles, particularly from consumer customers, was also important for Ford’s revenue growth.
As a result, Ford’s CEO John Lawler shared on an earnings calls that the company is prepared for the looming recession.
“We are in much better shape heading into a potential recession than at any other time I can think of”.
However, according to the New York Times, he did note that the company is “not cost-competitive today”, and therefore the car manufacturer is considering cutting jobs.
“As new skills are needed, old skills aren’t required anymore, and there could be changes to the types of skills we have in the company,” Lawler added.
Ford’s CEO shares his views on layoffs
On the same earnings call, Ford CEO Jim Farley also hinted that job cuts were on the table.
As reported by Bloomberg, Farley shared: “We absolutely have too many people in some places, no doubt about it. We have skills that don’t work anymore, and we have jobs that need to change.”
While Farley didn’t say how many jobs Ford planned to cut, previous reports by Bloomberg suggest that the company may need to cut as many as 8,000 jobs (4% of its 200,000 global employees) as the manufacturer shifts away from fossil fuels and towards electric cars.
Ford wants to make $ 3 billion in cost cuts as it tries to transform its electric vehicle unit into “the profit and cast engine for the entire enterprise”.
The issue, according to Business insider, is that Ford is too complex as a business, and needs to be modernized – it wants to change this for its new business units, and that will require letting some workers go.
UNLEASH reached out to Ford for comment but is yet to receive a response.
These comments by Ford come as a major competitor, General Motors, also reported their Q2 2022 earnings.
While General Motors’ revenue also rose 4% to $35.8 billion, it reported a 40% drop in profit in Q2. This is despite a growth in vehicle sales from 760,000 in Q2 2021, to 817,000 now.
Despite these disappointing results, General Motors CFO Paul Jacobson ruled out job cuts for the moment. He did note that the company was slowing down its hiring.
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