General Engines is offering employee buyouts in a bid to accelerate cost-cutting efforts announced in its 2022 earnings report. The company has not announced the number of employees it wants to lay off. Its immediate intention is to eliminate $2 billion in operating costs from its balance sheet as it strives to meet its goal of transitioning from internal combustion to electric vehicles by 2035, according to PA reports.
“As part of our plan to accelerate attrition and achieve $2 billion in savings by the end of 2024, General Motors announces a voluntary departure program for all U.S. employees with at least five years of service and all global executives with at least two years of service,” GM spokeswoman Maria Raynal said. Autoblog in an emailed statement. “This voluntary program offers eligible employees the opportunity to change careers or retire early. We offer three packages based on enterprise level and service. Employees are strongly encouraged to consider the program.”
“By sustainably reducing structured costs, we can improve vehicle profitability and remain agile in an increasingly competitive market,” Raynal said.
GM extended the offer to US employees and certain global executives. U.S. workers with at least five years of tenure have been offered one month’s pay for each year of service (capped at one year) along with temporary health coverage and a partial payment of premiums due for 2022. The global executives with at least two years of service were offered their base salary, applicable incentives and temporary medical coverage. All employees to whom a buyout has been offered are eligible for outplacement services.
The deadline for employees to accept the package is March 24 and those who accept the buyout will have to leave the company by the end of the second quarter (June 30).
In a call with reporters following his January announcement of results, 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 only filling strategically important positions when they become vacant through natural attrition, which has clearly proven insufficient so far.