GM says that its plan to buy out employees as a long-term cost-cutting measure is a success with some 5,000 soon to depart the company. That figure helps General Motors achieve about half of its goal of reducing costs by $2 billion by the end of 2024. For now, layoffs seem to be out of the picture.
General Motors CEO Mary Barra sent employees an email in March offering those with five years at the company (or executives with two) to take a buyout and depart the brand. That offer went out to enough of the staff that if all had accepted it would’ve initially cost GM $1.5 billion. Now, we know that figure is closer to $1 billion in total.
In a memo to employees, Barra said that “Through the VSP (voluntary separation program) we’ll have roughly 5,000 U.S. salaried employees and global executives who are able to retire early or pursue other interests.
These results confirm that a company-wide Involuntary Separation Program is not a consideration at this point. As always, leaders will continue to have the flexibility to manage their organizations to drive high performance and impact.”
More: Lucid Cutting 18% Of Workforce In New Restructuring
Reducing the need for layoffs is obviously a good thing but analysts are quick to point out that the market is volatile. As such, having a nimble business model is proving all the more vital. GM spokesman David Barnas told the Detroit Free Press that “The steps we are taking will allow us to maintain momentum, remain agile, and create a more competitive GM.”
Notably, General Motors isn’t alone in cutting jobs among the ‘big 3’. Stellantis, the owner of Chrysler, Jeep, Dodge, and RAM, cut over 1,000 jobs in February and Ford slashed some 3,000 last August. Other smaller automakers like VinFast, Lucid, and Rivian have also slashed jobs in recent months too.
