Ford Motor Company is set to cut 1,000 jobs at its electric vehicle (EV) plant in Cologne, Germany, a move that underscores the mounting challenges facing the auto industry’s transition to electrification amid faltering demand in Europe. The announcement, made on September 17, 2025, comes as part of Ford’s broader restructuring efforts across its global operations, with the company citing persistently weak EV sales as a key driver for the layoffs.
The Cologne facility, which produces the electric Explorer SUV, will shift from two daily shifts to a single-shift operation beginning in January 2026, according to multiple reports from Reuters, Bloomberg, and the Associated Press. Ford stated, “In Europe, demand for electric cars remains well below industry forecasts,” a sentiment echoed across industry analyses and recent market data.
Ford’s decision to reduce its workforce in Cologne is not an isolated event. It builds on a restructuring plan unveiled in November 2024, which targeted approximately 4,000 job cuts across Europe and the UK by 2027, with the deepest reductions—about 2,900 positions—expected in Germany. The new round of layoffs in Cologne will bring the total workforce reduction in Ford’s European operations to roughly 18%.
The automaker emphasized its intention to minimize the impact on employees by offering voluntary redundancy packages and buyout offers wherever possible. While the company hopes this approach will ease the transition, the real uptake of these packages remains uncertain. Earlier in 2025, workers at the Cologne plant threatened to strike in response to the looming job cuts, but a deal reached in July with the IG Metall union provided job guarantees for more than 10,000 employees at the plant until 2032, as reported by AFP.
Ford’s woes are rooted in a mismatch between industry expectations and the reality of EV adoption in Europe. Back in 2023, Ford invested approximately $2 billion (2.3 billion euros) to modernize the Cologne plant, transforming it into a state-of-the-art, carbon-neutral facility dedicated to electric vehicle production. This significant outlay was made in anticipation of robust growth in the low-emission vehicle market. However, the company’s optimism has not been matched by consumer demand.
Industry analysts had projected that electric vehicles would account for 35% of new vehicle registrations in Europe by the end of 2025. The current reality is far less rosy: EVs made up just 15.6% of the European market through July 2025, up from 12.5% a year earlier, but still well below expectations. Growth has been modest, with experts now forecasting a 20% market share by year’s end—a figure that falls short of the ambitious targets set by both automakers and policymakers.
Several factors have contributed to the sluggish uptake of electric vehicles. High upfront prices remain a significant barrier for many consumers, while the lack of a robust charging infrastructure across much of Europe has further dampened enthusiasm. The withdrawal of purchase subsidies in Germany, a move that removed a key financial incentive for would-be EV buyers, has also played a role in slowing sales.
Despite these headwinds, Ford managed to sell 260,000 vehicles of all types in the first seven months of 2025, representing a modest 0.7% increase from the previous year. The company’s market share held steady at 3.3%, according to the European Automobile Manufacturers’ Association. However, this stability masks the underlying turbulence within the EV segment, where growth has not kept pace with the company’s investments or broader industry hopes.
Ford’s restructuring is not confined to Germany or even Europe. The company has announced similar workforce reductions in other regions as it seeks to align its operations with market realities. In August 2025, Bloomberg reported that over 470 jobs would be eliminated at Ford’s South African plants in Pretoria and Gqeberha. Meanwhile, in North America, Ford laid off nearly 350 employees from its connected-vehicle software division across the US and Canada in May 2025, accounting for 5% of that team, as reported by USA Today.
The automaker’s challenges are emblematic of broader trends within the global automotive industry. Other major manufacturers, including General Motors and Volvo Cars, have also announced significant job cuts in 2025 amid faltering EV demand, rising costs, and supply chain disruptions. Volvo, for example, eliminated 3,000 jobs earlier this year, a move that highlighted the vulnerability of white-collar workers alongside their counterparts in manufacturing and production.
Industry observers have pointed to intensifying competition from China’s heavily subsidized EV sector as another source of pressure on Western automakers. Chinese manufacturers have been able to offer lower-priced electric vehicles, further complicating efforts by companies like Ford to gain traction in the European market. Trade tensions and tariffs have only added to the uncertainty, especially in the US, where automakers are bracing for additional layoffs as they recalibrate their business strategies.
Ford’s management has been candid about the need to continually assess production levels and adjust output to match demand. The company explained, “We continuously evaluate the demand for our services and adjust production volumes accordingly,” a refrain that has become all too familiar across the industry as automakers grapple with a rapidly evolving landscape.
For workers in Cologne and elsewhere, the future remains uncertain. While the agreement with IG Metall provides some measure of security for a significant portion of the plant’s employees, the broader trend points toward ongoing volatility. The HR Digest described the general atmosphere as “bleak,” noting that it remains unclear whether the pace of job cuts will slow as the industry heads into 2026.
Ford’s $2 billion investment in the Cologne plant stands as a testament to the company’s commitment to electrification, but it also serves as a cautionary tale about the risks of betting too heavily on projected demand that fails to materialize. As the company and its competitors navigate these choppy waters, the coming months will be critical in determining just how quickly—and successfully—the automotive industry can adapt to the new realities of the EV market.
The job cuts in Cologne are more than just a local story; they are a reflection of the global challenges facing an industry in transition. For Ford, the path forward will demand flexibility, innovation, and a willingness to make tough choices. The world will be watching to see if these moves can restore momentum to the automaker’s ambitious electrification strategy.
