MICHIGAN: General Motors Co on Thursday said that it was offering buyouts for most of its salaried workers and expects to take a pre-tax charge of up to 1.5 billion dollars to cover the costs.
The announcement comes as layoffs by the United States (US) companies in the previous two months touched their highest since 2009, with the technology sector accounting for more than a third of the over 180,000 job cuts announced. The largest United States automaker, in January, disclosed a $2 billion cost cut target, including reducing employment through attrition.
GM’s stance on staff reduction
General Motors said that under the terms of the staff reduction programme, all United States salaried workers with at least five years of service and all world executives with at least two years of service will be offered lump sum payments and other compensation to exit the company.
CEO GM, Mary Barra said in a memo to workers seen by Reuters, the automaker was outlining the “biggest opportunities to decrease our structural cost,” including decreasing “vehicle complexity and expanding the use of shared subsystems between the existing internal combustion engine and future electric vehicle programmes.”
She cited decreasing discretionary spending and “decreasing salaried staff through attrition, primarily in the United States (US).”
“By permanently bringing down structured costs, we can upgrade car profitability and remain nimble in a rising 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 constructed into our culture.”
General Motors, whose shares fell 4.3 percent, had 58,000 salaried employees at the end of 2022. The eligible employees interested in the voluntary programme must sign up by March 24 while those agreeing will leave the company by 30th June. Barra added, “taking this step now will help avoid the potential for involuntary actions.” The buyouts are separate from job cuts GM made last month. A GM executive in February this year said it was cutting hundreds of executive-level and salaried jobs.
