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GM Cuts 5,000 Salaried Jobs Through Voluntary Buyouts
Published Apr 04, 2023 03:25PM ET
Updated Apr 04, 2023 04:09PM ET
© Bloomberg. BERLIN - NOVEMBER 26: The logo of U.S. carmaker General Motors, or GM, is visible on the front grille of a GM Hydrogen 4 fuel cell-powered car at a presentation by Opel and GM on November 26, 2008 in Berlin, Germany. Opel, which is ownded by GM, has asked the German government for help in overcoming its difficulties resulting from the current financial crisis and the serious difficulties of GM. (Photo by Sean Gallup/Getty Images)
(Bloomberg) -- General Motors Co (NYSE:GM). is buying out 5,000 salaried staffers globally as part of a cost cutting move that will save $1 billion on an annual basis starting this year, according to Chief Financial Officer Paul Jacobson.
The voluntary buyouts cover 6% of GM’s 81,000 white-collar employees and should allow the Detroit automaker to avoid involuntary dismissals, Jacobson said Tuesday. The cuts should also deliver roughly half of the company’s broader goal of saving $2 billion a year and will result in a $1 billion charge in 2023.
“We were willing to pay for a voluntary program to do everything we can to avoid involuntary layoffs,” Jacobson said at Bank of America (NYSE:BAC) conference in New York. “We’re in a position where we’ll be able to do that.”
The automaker announced the buyout plan last month as it sought to avoid layoffs. Involuntary job cuts are “not a consideration at this point” as a result of the voluntary reductions, GM said Tuesday in a separate statement.
GM is trying to conserve cash as it spends $35 billion over the next several years to convert its lineup of internal-combustion vehicles to all-electric powertrains. The company plans to offer 30 electric models globally by 2025.
Jacobson said the company is also staying lean as a precaution against the risk of a potential economic downturn.
©2023 Bloomberg L.P.
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