General Motors is offering buyouts
General Motors expects $1.5B charge after announcing voluntary separation program
General Motors (GM) plans to offer a voluntary buyout program to the majority of its 58,000 U.S. white-collar employees, according to a letter sent by CEO Mary Barra on Thursday. The program called the “Voluntary Separation Program” will be open to all U.S. salaried employees who have worked at the company for five or more years as of June 30. GM will also offer buyouts to executives who have at least two years of experience outside the U.S.
The automaker aims to reduce structural costs by $2 billion over the next two years and expects to take a pre-tax charge of up to $1.5 billion related to the buyouts, with the majority of the charges expected to be all-cash and occur during the first half of the year.
The program is designed to accelerate attrition in the U.S., potentially avoiding involuntary layoffs in the future. The move comes after GM announced last week that it would terminate approximately 500 salaried positions globally.
GM is encouraging employees to consider the program, which offers one-month pay for every year worked up to 12 months, COBRA health coverage, prorated team performance bonuses, and outplacement services for U.S. employees who are approved for the buyout. Global employees will receive base salary, incentives, COBRA, and outplacement services.
Eligible employees who are interested in the program must sign up by March 24, and those who elect to take a voluntary package and are approved will depart by June 30. GM last offered such a large buyout program in 2018-2019, for roughly 18,000 North American salaried employees.
The automaker announced its $2 billion cost-cutting program in January, with between 30% and 50% of the savings expected during 2023. At the time, GM executives said they were planning headcount reductions through attrition rather than layoffs.
General Motors expects $1.5B charge after announcing voluntary separation program By Investing.com
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