GM Says 5,000 White-Collar Workers to Depart Through Buyouts
About 5,000 salaried workers and executives at
General Motors Co.
GM -2.07%
have accepted voluntary buyout offers through a separation program announced last month, the company said Tuesday.
GM initiated the head-count reduction as part of an effort to cut $2 billion in costs by the end of 2024, a spokesman said.
The company expects to take a roughly $1 billion charge during the quarter as a result of the buyouts, said GM Chief Financial Officer
Paul Jacobson
at a
Bank of America
conference.
GM’s buyout offer was extended to all U.S. white-collar employees with at least five years at the company as of June 30, a group representing a majority of its roughly 58,000 salaried employees in the country. The car maker offered lump-sum payments and other compensation to the eligible employees.
GM said that savings from the voluntary buyouts give it confidence to be able to realize at least 50% of its $2 billion cost-saving target this year. The company plans to achieve the remaining cuts by reducing vehicle complexity and expanding the use of shared subsystems between its gas-powered cars and electric vehicles. Plans also include decreasing spending across all parts of the company.
“This was a tool to get us to really accelerate the attrition curve,” Mr. Jacobson said.
The buyouts are the latest in belt-tightening measures that have been under way across the auto industry as cooling demand, higher interest rates and affordability concerns dent some of the sales momentum of the past few years.
Before the voluntary buyout program was revealed, The Wall Street Journal and other media outlets reported in March that GM was cutting roughly 500 salaried employees following a recent performance review.
Ford Motor Co.
cut about 3,000 workers last summer and indicated earlier this year that more layoffs could be coming. EV startup
Rivian Automotive Inc.
has shed about 12% of its workforce through layoffs over the last several months. Jeep-owner Stellanis NV also offered buyouts last year to salaried employees.
GM has said it expects to incur up to $1.5 billion of pretax separation charges, which would be substantially all cash-based, along with up to $300 million in pretax, noncash pension-curtailment charges.
As a result of the voluntary buyouts, GM said that involuntary separations aren’t in consideration at this point. Employees who took the buyout offers would need to depart the company by June 30, GM has said.
GM’s stock was down 2.6% in midday trading.
Write to Ryan Felton at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
About 5,000 salaried workers and executives at
General Motors Co.
GM -2.07%
have accepted voluntary buyout offers through a separation program announced last month, the company said Tuesday.
GM initiated the head-count reduction as part of an effort to cut $2 billion in costs by the end of 2024, a spokesman said.
The company expects to take a roughly $1 billion charge during the quarter as a result of the buyouts, said GM Chief Financial Officer
Paul Jacobson
at a
Bank of America
conference.
GM’s buyout offer was extended to all U.S. white-collar employees with at least five years at the company as of June 30, a group representing a majority of its roughly 58,000 salaried employees in the country. The car maker offered lump-sum payments and other compensation to the eligible employees.
GM said that savings from the voluntary buyouts give it confidence to be able to realize at least 50% of its $2 billion cost-saving target this year. The company plans to achieve the remaining cuts by reducing vehicle complexity and expanding the use of shared subsystems between its gas-powered cars and electric vehicles. Plans also include decreasing spending across all parts of the company.
“This was a tool to get us to really accelerate the attrition curve,” Mr. Jacobson said.
The buyouts are the latest in belt-tightening measures that have been under way across the auto industry as cooling demand, higher interest rates and affordability concerns dent some of the sales momentum of the past few years.
Before the voluntary buyout program was revealed, The Wall Street Journal and other media outlets reported in March that GM was cutting roughly 500 salaried employees following a recent performance review.
Ford Motor Co.
cut about 3,000 workers last summer and indicated earlier this year that more layoffs could be coming. EV startup
Rivian Automotive Inc.
has shed about 12% of its workforce through layoffs over the last several months. Jeep-owner Stellanis NV also offered buyouts last year to salaried employees.
GM has said it expects to incur up to $1.5 billion of pretax separation charges, which would be substantially all cash-based, along with up to $300 million in pretax, noncash pension-curtailment charges.
As a result of the voluntary buyouts, GM said that involuntary separations aren’t in consideration at this point. Employees who took the buyout offers would need to depart the company by June 30, GM has said.
GM’s stock was down 2.6% in midday trading.
Write to Ryan Felton at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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