GM offers buyouts as part of cost reduction plan
Automaker says buyout plan ‘not layoffs’
General Motors will offer buyouts to most salaried employees and global executives, in a move that will cost up to $1.5 billion in estimated pre-tax charges to cover the costs, the largest U.S. automaker announced on Thursday.
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.
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"Employees are strongly encouraged to consider the program," the automaker added. "By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market."
Eligible employees interested in the voluntary program must sign up by March 24 and those agreeing will leave GM by June 30.
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.
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In January, the U.S. automaker disclosed a $2 billion cost cut target, including reducing employment through attrition, although the buyouts are separate from job cuts the company made last month, with 30% to 50% of these savings expected during 2023 and the full amount expected in 2024.
A GM executive said in February the company was cutting hundreds of executive-level and salaried jobs, while peer Ford said it planned to eliminate 3,800 product development and administration jobs in Europe in the next three years.
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General Motors Company
|GM||GENERAL MOTORS CO.||33.29||+0.88||+2.72%|
|F||FORD MOTOR CO.||12.09||+0.71||+6.24%|
Reuters contributed to this report.