Home » US Employment News » 5,000 General Motors staff to leave after accepting buyouts
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Around 5,000 salaried workers at General Motors have accepted voluntary buyouts to leave the company.
The company announced the move last month to lower its headcount and overhead costs.
GM CFO Paul Jacobson said the firm expects to incur nearly $1 billion in charges during the quarter from the program.
The workforce downsizing was part of its plan to trim $2 billion in structural costs by the end of 2024.
Read More: General Motors offers voluntary buyouts to US staff as cost-cutting continues
Jacobson said the opt-in rate for the “Voluntary Separation Program” was in line with its expectations, putting GM "in a position" to avert layoffs.
He said: “I think we’re in a position where we’re going to be able to do that.”
GM predicts that most of those who have agreed to the buyout will depart by the end of June.
Last month CEO Mary Barra warned that if not enough staff participated, involuntary steps would be taken.
Read More: General Motors to cut around 500 staff to save $2 billion
Most of the company's 58,000 US white-collar employees were offered buyouts.
The salaried staffers must be with the firm for five years as of June 30 to be eligible for the program.
The criterion for executive-level employees was two years of employment.
“This was a tool to get us to really accelerate the attrition curve; got a pretty quick payback,” Jacobson said.
GM announced the $2 billion cost-cutting plan in January, estimating that 30 to 50 percent of the savings will be realized by 2023.
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At the time, executives said they intended to reduce headcount through attrition instead of layoffs.
On Tuesday, May 4, Jacobson said that GM would likely be at the “higher end” of that percentage range for 2023.
Last month, GM said it expected to pay a pretax charge of up to $1.5 billion for the buyouts.
The firm said most of the costs would likely be all cash and occur during the first half of the year.
Jacobson said GM is "working through" the full scope of the charges and expenses may spill over into the second quarter.
Source: CNBC
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