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.