MILAN -- Stellantis plans to cut as many as 2,000 jobs in Italy this year to further reduce its workforce in Fiat's former home country as the transition to electric vehicles takes its toll.
The automaker, formed from the merger of PSA Group and Fiat Chrysler, and local unions agreed on the reductions that represent about 4.3 percent of its 47,000 workforce in the country. The decision follows similar cuts last year.
The planned exits will come mostly from workers not directly involved in production, who will receive benefits that include early retirement and as much as two years of salary for older workers, unions said Monday in a statement confirmed by Stellantis.
Automakers have been grappling with inflation and supply-chain disruption as they retool their factories to transition to battery-powered cars, prompting a cost-cutting drive.
Ford Motor earlier this month said it will cut 3,800 positions in Europe as developing and producing electric vehicles requires fewer workers.
Stellantis cited the EV shift for its plan to idle a Jeep-making factory in Illinois. "The cost of electrification is going to have an impact on the footprint of business that we are going to have around the world," CEO Carlos Tavares told reporters earlier this month.
The maker of Jeep SUVs and Peugeot cars has been in talks with the Italian government about the future of the country's automaking industry and bolstering demand for EVs.
Stellantis will boost production at its Melfi plant in southern Italy to focus on EVs and plug-in hybrid vehicles, and is moving ahead with plans for a battery factory in Termoli that is due to start production in 2026. The manufacturer in late 2021 said that it's seeking to turn its Turin factory into an EV hub.