GM Avoids Layoffs: 5,000 Employees Accept Buyouts

Automaker Aims to Cut $2 Billion by 2024

The shift from conventional engines to electric-powered automobiles is necessitating automakers to reconsider their deployment of manpower and money. Particularly at General Motors, this has meant cutting down staff size to ensure monetary efficiency during these unsure times. GM has revealed that they won’t be resorting to lay-offs in order to meet their budgetary goals as nearly 5,000 unpaid workers accepted a voluntary severance package.

Paul Jacobson, the Chief Financial Officer of GM, had announced the news at a Bank of America automotive conference, as reported by Automotive News. The move is expected to generate cost savings totaling $1 billion. CEO Mary Barra, who authored the letter that was purportedly sent to all employees, stated that layoffs are currently not an option under consideration. Furthermore, the memo assured that these buyouts would in fact help maintain the forward trajectory of the company, allow it to stay nimble and agile, while readying itself for future competitive challenges.

Earlier this year, General Motors revealed its highest annual profits ever for 2022, leading to the necessity for reducing costs. The Detroit-headquartered motor car manufacturer declared its intention to realize a $2 billion cutback in expenditures by 2024 without involving redundancies, which presently appears practical. In addition, they intend to reduce product intricacy and corporate outlays to conserve additional resources across the following two years.

By the end of March 2021, Automotive News declared that company personnel had till the 24th to reflect on the buyout and those who accepted will be exiting past June 30. General Motors proffered this opportunity to U.S. salary-based workers who have been with the business for more than five years and any executive, wherever they may currently reside, that has been involved for a minimum of two years. Jacobson then went on to state that in 2023, between thirty and fifty percent of their aim of two billion should be reached.

GM is looking towards 2022, with anticipated earnings of $14.5 billion and total revenue of $156.7 billion. Unfortunately, prospects for 2023 are far less hopeful, predicting gains somewhere between $10.2 and $12.5 billion. Nonetheless, it is during this year that the automaker plans to roll out three further electric models – the Silverado EV, Equinox EV, and Blazer EV – as well as expanding their line of the Cadillac Lyriq, GMC Hummer EV, and BrightDrop Zevo 600.

Source: Automotive News