Ford announced it is starting consultations with its union partners and other key stakeholders to implement a comprehensive transformation strategy aimed at strengthening the Ford brand and creating a sustainably profitable business in Europe.
Going forward Ford will seek to offer an electric or hybrid version of all its vehicles and the electrification plans are not contingent on striking a deal with Volkswagen, Armstrong said.
Ford will axe jobs across Europe in a drive to return its operations to profitability.
Ford's announcement on layoffs came as Britain's biggest carmaker Jaguar Land Rover (JLR) announced "substantial" job cuts. Ford will focus instead on developing more profitable "crossover" vehicles.
Ford started consultations with unions, with details of any job cuts not expected until later in the year, although staff now based at Warley in the West Midlands will move to Dunton in Essex.
He said the scale of the restructuring assumed that Britain would leave the European Union as scheduled on March 29 with a negotiated deal defining trading relations.More news: Johannesburg Test: Markram helps South African recovery against Pakistan
"If Brexit went in the wrong direction we would have to have another look, to mitigate that", Armstrong said.
Structural cost improvements will be supported by reduction of surplus labor across all functions - salaried and hourly.
It has not released any figures, as discussions with unions are continuing, but that it could be in "thousands".
Ford Europe, which now employs 53,000 people, has struggled to turn a profit, reporting a €245 million ($282 million) loss before interest and taxes in the third quarter, equivalent to a negative 3.3% EBIT margin.
It is understood that while this is a preoccupation for the company, it is one of many factors affecting the business, which has been underperforming for years.More news: Documentary accusing Michael Jackson of sexually abusing boys to premiere at Sundance
"We believe Ford Europe could require as much as a 20 to 30 percent reduction of capacity and headcount", Morgan Stanley analyst Adam Jonas said in a note on Thursday.
The company already cut 1,000 jobs past year, but new plans to improve cash flow by £2.5 billion ($3.2 billion) include "substantial" cuts to employment that will run into the thousands, a source told Reuters, affecting managerial, research, sales and design staff, but not line workers.
Mr Armstrong also said the company was in negotiations with staff representatives about potential job cuts at its Saarlouis plant in Germany, where 6,190 staff assemble cars, as the firm considers discontinuing production of its Ford C-Max model.
Management, marketing and administrative roles are expected to be the main target of JLR's jobs cuts, which will attempt to deliver £2.5bn of cost-cutting measures amid a downturn in Chinese sales, the decline in diesel sales and concerns surrounding Brexit.
They mean a downturn in Chinese sales, a slump in diesel sales and concerns about United Kingdom competitiveness post-Brexit.More news: R. Kelly's streams increase after docu-series alleges abuse