General Motors Co. says it is offering voluntary buyouts to salaried staff as part of a plan announced in January to cut $2 billion in annual costs.
The Detroit automaker will offer workers a lump sum payment and other compensation based on tenure, according to a regulatory filing Thursday. The move is designed to “accelerate the normal attrition process and the resulting cost savings,” GM said.
GM expects approximately $1.5 billion in pre-tax, mostly cash-based payments related to the severance program and $300 million in pre-tax, non-cash pension reduction payments. Most of the expenses will occur in the first half of this year.
The buyouts came shortly after Chief Executive Officer Mary Barra cut hundreds of management jobs as the company weeded out poor performers.
Automakers are grappling with rising interest rates and stubborn inflation which deters car buyers in the future. GM and other manufacturers are also cutting costs as they spend billions introducing electric vehicles — many of which lose money initially or bring in thinner revenue streams.
rival Ford Motor Co. already cutting thousands of jobs across the US and Europe in recent months, and CEO Jim Farley has felt for more to come. Stellar N.V nonsense an assembly plant in Belvidere, Illinois, with CEO Carlos Tavares partly blaming the investment needed to electrify the company’s fleet.
GM said in Thursday’s filing that 30% to 50% of the expected savings should come this year with the full amount expected by 2024.
In January, Barra said GM would look for ways other than forced layoffs to reduce the number of people.
“I want to be clear, though: We’re not planning layoffs,” Barra said on the fourth-quarter earnings call. “We are limiting our hiring to the most strategically important roles and we will use attrition to help manage the overall headcount.”
GM shares fell 0.7% at 9:52 am in New York.
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