New York (CNN) General Motors said in January It will save $2 billion without planning any layoffs. But on Thursday it said it was looking for workers to leave voluntarily.
In a regulatory filing, the automaker said it was looking to save costs through attrition and a voluntary dismissal program in which eligible employees would receive a lump sum payment and other compensation based on how long they had worked for the company. The acquisitions will cost the company $1.5 billion before taxes this year.
A GM spokesperson told CNN that the voluntary separation program will be offered to all US salaried employees with at least five years of service and global executives who have worked with the company for at least two years. The company said in a statement that employees are “strongly encouraged to consider” the program.
“By permanently lowering structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market,” a GM spokesperson said in a statement.
The news comes on the heels of the abolition of hundreds of wage workers’ jobs earlier this month. A person familiar with the plans told CNN that these job cuts will affect a few hundred white-collar employees globally.
General Motors has 167,000 employees globally, of which 124,000 are based in North America. This includes more than 42,000 members of the United Auto Workers union.
The company recently reported record annual profits for 2022 and also announced plans to cut costs by $2 billion over the next two years, including cutting overall company overheads. But at the time, executive director Mary Barra told investors, “I want to be clear, though, that we’re not planning layoffs. We’re limiting our hiring to only the most strategically important roles and we’ll use attrition to help manage the total number of chiefs.”
GM (GM) He spends a large amount of money to shift production from traditional gasoline-powered cars to a range of pure electric cars. While this will ultimately reduce labor costs since EVs don’t take many man-hours to produce, they do require billions of dollars in upfront investment. GM said it will invest $35 billion between now and 2025 in the shift to electric vehicles. Its goal is to have the entire range of passenger cars by 2035.
In a related step, stronghold (F) Plans announced in February to 3,800 jobs eliminated across Europe, citing difficult economic conditions and its main push towards electric vehicles. It said in a statement that the plan is part of the company’s efforts to create “a more lean and competitive cost structure for Ford in Europe,” adding that it intends to achieve job cuts through voluntary layoffs.
CNN’s Chris Isidore and Peter Valdes-Dabena contributed to this report
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