Stellantis, the renowned Jeep maker resulting from the merger of PSA Peugeot and Fiat Chrysler, has announced the layoff of approximately 400 white-collar employees in the United States. The decision comes amidst the automotive industry’s pivotal shift from traditional combustion engines to electric vehicles.

Primarily impacting roles in engineering, technology, and software at the Auburn Hills headquarters and technical center in Michigan, the layoffs signify a strategic move to navigate the uncertainties surrounding the electric vehicle transition. Employees received notifications starting Friday morning, reflecting the company’s commitment to optimizing its cost structure amid heightened competitive pressures.

Stellantis emphasized its dedication to efficiency enhancement and resource alignment in response to unprecedented challenges in the global auto industry. Effective March 31, the layoffs represent approximately 2% of Stellantis’ U.S. workforce in critical areas such as engineering, technology, and software. Affected workers will receive separation packages and transition assistance as part of the company’s support measures.

Carlos Tavares, Stellantis CEO, reiterated the significant cost disparity between electric vehicles and their gasoline counterparts, underscoring the necessity to reduce costs to ensure the affordability of EVs for the mass market. Despite significant strides in expanding the company’s electric vehicle portfolio, including plans to launch 18 new EV models this year, Tavares stressed the ongoing need to address pricing competitiveness, particularly in comparison to Chinese manufacturers.

The announcement of workforce reductions follows similar initiatives by crosstown rivals Ford and General Motors, who have also implemented layoffs in response to the electric vehicle transition. Ford’s CEO, Jim Farley, cited the necessity of aligning workforce skills with the company’s transition from internal combustion to battery-powered vehicles, leading to the release of approximately 4,000 full-time and contract workers in 2022. Similarly, General Motors saw around 5,000 salaried workers, particularly in engineering, opting for early retirement and buyout offers last spring.

In navigating the evolving automotive landscape, Stellantis remains focused on innovation and cost optimization to maintain its competitive edge while embracing the transformative potential of electric vehicles.