General Motors Co. said it’s 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 the workers lump sum payments 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 anticipates as much as $1.5 billion in pre-tax, mostly cash-based charges related to the separation program and $300 million pre-tax, non-cash pension curtailment charges. The majority of costs will be incurred in the first half of this year.
The buyouts come shortly after Chief Executive Officer Mary Barra fired hundreds of management jobs as the company weeded out poor performers.
Automakers are wrestling with rising interest rates and stubborn inflation that could deter car buyers going forward. GM and other manufacturers have also been cutting costs as they spend billions to introduce electric vehicles — many of which lose money initially or bring in thinner profit margins.
Rival Ford Motor Co. has been cutting thousands of jobs across the US and Europe in recent months, and CEO Jim Farley has hinted that more may be coming. Stellantis NV idled an assembly plant in Belvidere, Illinois, with CEO Carlos Tavares blaming in part the investment needed to electrify the company’s fleet.
GM said in Thursday’s filing that 30% to 50% of its expected savings should come this year with the full amount anticipated in 2024.
In January, Barra said GM would look for ways other than forced layoffs to reduce headcount.
“I do want to be clear, though: We’re not planning layoffs,” Barra said on the fourth-quarter earning call. “We are limiting our hiring to only the most strategically important roles and we’ll use attrition to help manage overall headcount.”
GM shares fell 0.7% at 9:52 a.m. in New York.
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