Topline
General Motors announced Tuesday roughly 5,000 white-collar employees opted for buyouts just a month after the company offered them in a cost-cutting move in an attempt to stave off layoffs, as major U.S. companies continue to reduce their head counts over fears high inflation and continued interest rate hikes could throw the economy into recession.
Roughly 5,000 GM employees reportedly participated in buyouts.
Key Facts
The buyout program is expected to cost GM—the maker of Buick, Cadillac, Chevrolet and GMC—roughly $1 billion, GM confirmed to Forbes.
The Detroit-based automaker had offered the buyouts last month for the majority of the company’s 58,000 U.S. salaried employees who had at least five years at the company, as well as executives with at least two years of service.
CEO Mary Barra warned at the time that if not enough employees participated in the buyouts, the company could implement layoffs—though the company announced Tuesday layoffs are “not a consideration at this point” as a result of the buyout program.
Employees who did participate in the program are expected to leave by the end of June, a spokesperson told CNBC.
Big Number
12. That’s the highest number of months of pay employees were eligible to receive if they opted into the buyouts, with one month of pay for every year of service at the company. Those employees also received healthcare through COBRA.
Key Background
The buyout program is part of a larger initiative announced in January to reduce costs by $2 billion by the end of 2024 as it attempts to lead the electric auto market, which GM spokesperson David Barnas said at the time would “improve vehicle profitability.” In February, GM reportedly laid off up to 500 of the company’s roughly 167,000 employees, amid a series of nationwide cuts across the country, primarily in the manufacturing and tech industries (Forbes has tracked the largest layoffs this year).
Tangent
GM has not been alone in reducing its headcount. Other automakers have resorted to job cuts in recent months, including Ford, which cut 3,000 jobs in August and Chrysler parent company Stellantis, which slashed more than 1,000 in February.
Further Reading
General Motors Offers ‘Majority’ Of Salaried Staff Buyouts (Forbes)
2023 Layoff Tracker: Hyland Software Laying Off 1,000 Staff As McDonald’s Reportedly Cuts ‘Hundreds’ (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2023/04/04/5000-gm-employees-reportedly-take-buyouts-in-cost-cutting-program/