GM offers buyouts to most salaried employees, in a bleak warning for white-collar workers
Nora Naughton
Thu, March 9, 2023
General Motors CEO Mary Barra.Nic Antaya / Stringer / Getty Images
GM employees have until March 24 to accept buyout offers.
Salaried employees with at least five years of experience qualify for the buyouts.
The move is part of a plan to cut $2 billion in costs by the end of next year.
General Motors is implementing a sweeping buyout program that covers a majority of its salaried workforce as the car company continues to cut costs to fund an electric future.
Any salaried GM employee with at least five years of experience or executive with at least two years of experience at the car company qualifies for the voluntary buyout program, sent to employees in a letter Thursday.
The buyout program is part of GM's plan to "accelerate attrition and achieve $2 billion in cost savings by the end of 2024," spokesperson Maria Raynal said in an emailed statement.
Packages vary by job title and tenure. All US salaried employees with at least five years of experience are eligible for one month of pay for every year of service up to 12 months, as well as a pro-rated performance bonus and outplacement services, the spokesperson said.
Eligible employees have until March 24 to accept the buyout offer, and once approved will leave the company by June 30.
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," Raynal said.
GM last rationalized its workforce in 2019, slashing about 15% of its North American salaried employees at the same time the company initiated plans to close several factories. Earlier this year, some experts wondered if GM and other car companies would outrun a larger trend of layoffs hitting the tech sector due to these actions.
Nora Naughton
Thu, March 9, 2023
General Motors CEO Mary Barra.Nic Antaya / Stringer / Getty Images
GM employees have until March 24 to accept buyout offers.
Salaried employees with at least five years of experience qualify for the buyouts.
The move is part of a plan to cut $2 billion in costs by the end of next year.
General Motors is implementing a sweeping buyout program that covers a majority of its salaried workforce as the car company continues to cut costs to fund an electric future.
Any salaried GM employee with at least five years of experience or executive with at least two years of experience at the car company qualifies for the voluntary buyout program, sent to employees in a letter Thursday.
The buyout program is part of GM's plan to "accelerate attrition and achieve $2 billion in cost savings by the end of 2024," spokesperson Maria Raynal said in an emailed statement.
Packages vary by job title and tenure. All US salaried employees with at least five years of experience are eligible for one month of pay for every year of service up to 12 months, as well as a pro-rated performance bonus and outplacement services, the spokesperson said.
Eligible employees have until March 24 to accept the buyout offer, and once approved will leave the company by June 30.
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," Raynal said.
GM last rationalized its workforce in 2019, slashing about 15% of its North American salaried employees at the same time the company initiated plans to close several factories. Earlier this year, some experts wondered if GM and other car companies would outrun a larger trend of layoffs hitting the tech sector due to these actions.
But as EV rollouts at the company stall, according to a report this week from The Wall Street Journal, it appears more downsizing is necessary.
Other car companies have announced job cuts this year, including Rivian and Ford. But GM's is the largest so far, impacting a majority of its 81,000 white-collar workers around the world.
Thu, March 9, 2023
By David Shepardson and Nathan Gomes
(Reuters) -General Motors Co on Thursday said it was offering buyouts for most of its salaried employees and expects to take a pre-tax charge of up to $1.5 billion to cover the costs.
The announcement comes as layoffs by U.S. companies in the past two months touch their highest since 2009, with the tech sector accounting for more than a third of the over 180,000 job cuts announced.
The largest U.S. automaker in January disclosed a $2 billion cost cut target, including reducing employment through attrition.
Under the terms of the staff reduction plan, all U.S. salaried employees with at least five years of service and all global executives with at least two years of service will be offered lump sum payments and other compensation to exit the company, GM said.
GM CEO Mary Barra said in a memo to employees seen by Reuters that the automaker was outlining the "biggest opportunities to reduce our structural cost" including reducing "vehicle complexity and expanding the use of shared subsystems between existing internal combustion engine and future electric vehicle programs."
She also cited decreasing discretionary spending and "reducing salaried staff through attrition, primarily in the United States."
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," Barra wrote. "Now more than ever, we need to have a mindset of taking cost in everything we do. It needs to be built into our culture."
GM expects to take the bulk of the charge in the first half of 2023.
GM, whose shares fell 4.3%, had 58,000 salaried employees at the end of 2022.
Eligible employees interested in the voluntary program must sign up by March 24 and those agreeing will leave GM by June 30. Barra added "taking this step now will help avoid the potential for involuntary actions."
The buyouts are separate from job cuts the company made last month.
A GM executive in February said the company was cutting hundreds of executive-level and salaried jobs. Peer Ford Motor Co said it planned to eliminate 3,800 product development and administration jobs in Europe in the next three years.
(Reporting by Nathan Gomes in Bengaluru, Joseph White in Detroit and David Shepardson in Washington; Editing by Arun Koyyur, Anil D'Silva and Mark Porter)
GM offers buyouts to salaried workers, cites economic concerns
It's a move designed to thwart future layoffs, GM says
BYRON HURD
Mar 9th 2023
General Motors is offering buyouts to salaried workers in an effort to accelerate the cost-cutting efforts announced in its 2022 earnings report. The company has not announced how many employees it wants to shed. Its immediate intent is to eliminate $2 billion in operating costs from its balance sheet as it works toward its intended goal of transitioning from internal-combustion to EVs by 2035, according to AP reports.
"As part of our plan to accelerate attrition and achieve $2 billion in cost savings by the end of 2024, General Motors is announcing a Voluntary Separation Program for all U.S. salaried employees with at least five years of service and all global executives with at least two years of service," GM spokesperson Maria Raynal told Autoblog in an emailed statement. "This voluntary program offers eligible employees an opportunity to make a career change or retire earlier. We are offering three packages based on level and service to the company. Employees are strongly encouraged to consider the program."
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," Raynal said.
GM extended the offer to U.S. salaried employees and some global executives. U.S. workers with at least five years' tenure were offered a month's pay for each year of service (capped at one year) along with interim health coverage and a partial payout of bonuses due for 2022. Global executives with at least two years of service were offered their base salary, applicable incentives and interim health coverage. All employees who were offered a buyout are eligible for outplacement services.
The deadline for employees to accept the package is March 24 and those who take the buyout will have to exit the company by the end of the second quarter (June 30).
In a call with reporters that followed its January earnings announcement, GM Chief Financial Officer Paul Jacobson said the company's position was strong enough that it expected to avoid layoffs. Instead, the company would rely on limiting hiring and fill only strategically important roles as they become vacant through natural attrition, which has evidently proved insufficient thus far.
BYRON HURD
Mar 9th 2023
General Motors is offering buyouts to salaried workers in an effort to accelerate the cost-cutting efforts announced in its 2022 earnings report. The company has not announced how many employees it wants to shed. Its immediate intent is to eliminate $2 billion in operating costs from its balance sheet as it works toward its intended goal of transitioning from internal-combustion to EVs by 2035, according to AP reports.
"As part of our plan to accelerate attrition and achieve $2 billion in cost savings by the end of 2024, General Motors is announcing a Voluntary Separation Program for all U.S. salaried employees with at least five years of service and all global executives with at least two years of service," GM spokesperson Maria Raynal told Autoblog in an emailed statement. "This voluntary program offers eligible employees an opportunity to make a career change or retire earlier. We are offering three packages based on level and service to the company. Employees are strongly encouraged to consider the program."
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," Raynal said.
GM extended the offer to U.S. salaried employees and some global executives. U.S. workers with at least five years' tenure were offered a month's pay for each year of service (capped at one year) along with interim health coverage and a partial payout of bonuses due for 2022. Global executives with at least two years of service were offered their base salary, applicable incentives and interim health coverage. All employees who were offered a buyout are eligible for outplacement services.
The deadline for employees to accept the package is March 24 and those who take the buyout will have to exit the company by the end of the second quarter (June 30).
In a call with reporters that followed its January earnings announcement, GM Chief Financial Officer Paul Jacobson said the company's position was strong enough that it expected to avoid layoffs. Instead, the company would rely on limiting hiring and fill only strategically important roles as they become vacant through natural attrition, which has evidently proved insufficient thus far.
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