Stellantis Shocks With WFH Day Mandate, Then Drops Layoff Bombshell; 400 Employees Laid Off Over Remote Call

Stellantis, the Italian-American automaker formed from the merger of PSA Peugeot and Fiat Chrysler, is making structural changes as it adapts to the growing demand for electric vehicles (EVs).

The company has recently made headlines with its decision to lay off over 400 white-collar workers in the United States.

The Italian automaker, headquartered in Auburn Hills, Michigan, is facing the challenge of transitioning from traditional combustion engines to electric propulsion. This recent move comes in response to the global automotive industry's shift towards sustainable mobility solutions.

Details of Layoffs

According to Fortune magazine, the layoffs primarily target 400 employees in engineering, technology, and software divisions. The affected workers were notified on Friday morning, where the company called for a mandatory remote work day. Moreover, the cuts is set to take effect on March 31.

The company stated that the layoffs represent approximately 2 per cent of its global workforce in these areas.

Reasons Behind the Decision

Stellantis CEO Carlos Tavares highlighted the need to improve efficiency and optimize cost structures to make EVs more affordable. He emphasised the higher production expenses linked to EVs compared to conventional gasoline-powered cars, necessitates the strategic adjustments. The company seeks to realign resources while safeguarding essential expertise to sustain its competitive position amid the dynamic automotive industry landscape, prioritizing adaptation to the evolving market demands.

Industry Context

Stellantis is not alone in facing workforce adjustments due to the shift towards electric mobility. Competitors like Ford and General Motors have also undergone restructuring. Ford and GM have implemented layoffs and offered buyout packages as they steer the transition to electric propulsion.

Future Outlook

Stellantis is also planning to introduce 18 new electric vehicles in 2024, with a focus on the North American market, marking a move in its electric vehicle product strategy.