General Motors is offering buyouts in an effort to cut $2 billion in costs
Updated March 10, 2023 at 9:31 PM ET
General Motors is offering buyouts to salaried employees in the U.S. and some global executives in order to cut $2 billion in costs over the next two years as the Detroit automaker makes the transition to electric vehicles.
CEO Mary Barra said in a statement Thursday that the "voluntary separation program" will be offered until March 24 and is a step that will help avoid "involuntary actions" later.
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasing competitive market," she said.
The buyouts will be offered to salaried employees with at least five years of time at GM, as well as to global executives with at least two years.
The company has some 58,000 employees on salary in the U.S. It is unknown how many employees GM is targeting for the buyouts.
General Motors initially announced the $2 billion in trims in January, with the company saying it expected between 30% and 50% in savings in 2023.
In 2021, GM announced that it aims to only be making electric vehicles by 2035.
The transition by car companies, however, is also leading to layoffs.
"In the past year, both Ford and Chrysler parent company Stellantis have announced U.S. layoffs prompted by the shift to electric vehicles — For cut 3,000 jobs in August and Stellantis laid off more than 1,000 in February," Forbes reported.
General Motors' cost-cutting measures are also being made to prepare for potential economic downtown or recession in the future, Chief Financial Officer Paul Jacobson said in February, according to The Associated Press.
Speaking at the Wolfe Research conference, Jacobson said that although GM's auto sales remain strong, the company is seeing vehicle prices starting to ease.
"We want to be cautious because we don't want to ignore the macro signs that are out there, because I don't want to be up here a year from now saying, uh, we missed it," Jacobson said.
Reaction to the cost-cutting measure and the buyouts has been muted so far. Though some netizens have criticized General Motors of gutting its workforce just a little over a decade after the company was bailed out by the U.S. government during the 2008-2010 automotive industry crisis.
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