Ford to Underperforming, Longterm Workers: Take Severance or Take Part in a 'Performance Enhancement Plan' The car manufacturer has some 30,000 salaried employees in the U.S. But it's been looking to cut down employees as part of its shift to electric vehicles.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

Jan Hetfleisch I Getty Images
A Ford Mustang electric car in 2021 in Germany

Perform better — or else.

The Wall Street Journal obtained an internal email (the authenticity of which the company confirmed) dated October 4 that said Ford was giving workers who had been at the company for more than eight years and whose performance has gone down two options: do a "performance enhancement plan" – or take severance.

The email was sent to all managers in the U.S. at the Dearborn, Michigan-based company and provided a few options for getting rid of lagging workers.

One is flagging the underperformers by focusing on "white collar" jobs. Those people can take severance or take part in a four to six-week improvement plan. If completed successfully, employees could stay on. But if not, the severance option is removed, WSJ reported.

It's the latest labor optimization move from large companies amid growing recession anxiety. Google sent out questions to employees about increasing efficiency at the company and has focused on cost-cutting. Meta "quietly" began slimming down staff in September.

Tech in particular faced a severe crash after two years of dizzying growth during the pandemic, but as WSJ notes, there's another factor at play for automakers: electric cars, which has been pushing the urge to cut costs at Ford.

Ford also laid off about 3,000 workers in August. This is all happening as the company is looking to nix billions in costs to so it can scale up its electric vehicle infrastructure.

"In China, we posted a loss of $200 million, driven by the investments we are making in electric vehicles," John Lawler, Ford CFO, said at the company's most recent earnings call last week.

Ford EV products include the truck, F-150 Lighting and the Mustang Mach-E.

The company also backed off its investment in autonomous vehicles. It and Volkswagen were major investors in a self-driving car company, Argo AI. It was shut down somewhat unexpectedly last week, per WIRED.

"In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company. Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end," Argo AI said in a statement.

Ford's CEO previously said there are simply too many employees, WSJ noted.

Ford, and "I think every company probably has too many people. I just -- we have to go do the workflows and decide how this works now going forward," CEO and president Jim Farley said at its earnings call in July.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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