The transition from internal combustion engines and battery-electric vehicles will force automakers to reprioritize their resources, including people. At General Motors, that means trimming the number of employees as it looks to save money during this uncertain period. The company has announced that it won’t need layoffs to meet its financial goals, as it is reporting that about 5,000 salaried employees took a voluntary buyout.
GM CFO Paul Jacobson shared the news during a Bank of America automotive conference, reports Automotive News. The buyouts will save $1 billion in cost. In a memo signed by CEO Mary Barra, the automaker told employees that layoffs are “not a consideration at this point.” The letter continued that the buyouts will help GM “maintain momentum, remain agile, and create a more competitive GM.”
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General Motors announced that it needed to cut costs earlier this year when it reported its record earnings for 2022. The Detroit-based automaker said it planned to cut costs by $2 billion by 2024 without forced layoffs, which now seems achievable. The company also plans to reduce product complexity and corporate expenses to save money further over the next two years.
According to Automotive News, employees had until March 24 to consider the buyout, and those who accepted it will leave by June 30. GM offered the voluntary buyout to US salaried employees with more than five years of service at the company and any executive anywhere in the world with at least two years of service. Jacobson said that the company should be able to achieve 30-50 percent of its $2 billion goal in 2023.
GM needed 2022 with $14.5 billion in earnings and $156.7 billion in total revenue. GM expects 2023 not to perform as well, predicting $10.2 to $12.5 billion in profits for the year. However, 2023 will also be the year that GM launches three new electric vehicles – the Silverado EV, Equinox EV, and Blazer EV. The company also plans to increase the production of its Cadillac Lyriq, GMC Hummer EV, and BrightDrop Zevo 600.
