General Motors expects a new round of buyouts to cost it somewhere around $1.5 billion as it tries to slim the company. Most of its salaried employees in the USA and those around the globe with at least two years of service will have the buyout option. The move comes at a time when GM is looking to cut at least $2 billion in costs over the next two years.
Notably, the buyouts are, for now, completely voluntary. “This voluntary program offers eligible employees an opportunity to make a career change or retire earlier. We are offering three packages based on level and service to the company. Employees are strongly encouraged to consider the program,” GM spokesperson Maria Raynal said in an emailed statement to Autonews.
Raynal added that “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.” Those words echo the sentiments expressed by General Motors CEO Mary Barra in an emailed memo to employees on Thursday.
Read: General Motors To Cut Hundreds Of Executive-Level And Salaried Jobs
In the email, Barra points out that the buyouts are “designed to accelerate attrition in the U.S.” At the same time, the GM CEO painted a pretty rosy picture of the “voluntary separation program” saying that it offers the opportunity to “explore a new industry, make a career change, further a personal business venture or decide you can retire earlier.” At the start of the year, GM had roughly 81,000 salaried employees worldwide and about 58,000 in the United States.
While the buyouts are voluntary for now, Barra did mention that “taking this step now will help avoid the potential for involuntary actions” in the future. Employees who take the buyout will get one month of pay for every year with the company for up to 12 months. In addition, they’ll continue to get COBRA health coverage along with prorated team performance bonuses and outplacement services.
Global employees will get the same COBRA and outplacement services but also get a base salary and incentives. Eligible employees have until March 24th to accept the buyout and those who choose it will depart the company no later than June 30th. GM is just the latest to try and streamline its business case by reducing employee headcount. Rivian, VinFast, and others have all made similar moves this year.
