Stellantis said on Tuesday that in response to the dynamic nature of the global auto industry, it plans to lay off an unspecified number of employees at its American plants in the coming months.

In a statement, Stellantis, the manufacturer of Jeep, Maserati, and Fiat, among others, said this move would guarantee the "company's long-term sustainability in a rapidly changing global market."

Stellantis Expects Capital Expenditures to Climb as It Shifts Focus to EVs

According to The Associated Press, the announcement follows the company's anticipated rise in capital expenditures as it shifts its focus from gas-powered to electric vehicles (EVs). 

Its first-quarter sales in the United States fell, and it incurred more expenses due to a new labor deal it struck with the United Auto Workers (UAW) union last year. The company did not say the precise date of the layoffs or provide a list of the reasons behind them. Approximately 43,000 people work at Stellantis factories.

Nevertheless, Automotive News reported on Monday that 199 full-time employees had been let go by Stellantis at the Ram pickup vehicle plant in Sterling Heights, Michigan, north of Detroit. There have also been layoffs among the company's white-collar employees this year.

Read Also: Tesla Slashes EV Prices in China, Germany and Other Countries in Europe as Sales Drop

Sustaining Inexpensive EVs Requires Global Cost Reduction

According to The Associated Press, Stellantis CEO Carlos Tavares has said that to maintain affordable EVs for the middle class, the firm must focus on decreasing costs worldwide. He added that electric cars are around 40% more expensive than their gasoline-powered counterparts.

Tavares pointed out that if prices were not reduced, these cars would be out of reach for middle-class consumers, leading to a smaller market and further price increases.

Read More: Toyota Halts Prius Orders, Recalls 135K Hybrids in Japan Over Rear Door Handle Issue