Add GM to the ranks of major US corporations looking to trim headcount.
On Thursday, the iconic American brand once affectionately known as “Generous Motors” said it’s “generously” offering to buy out salaried staff as part of a bid to speed up a $2 billion cost-cutting initiative.
The company described the “voluntary separation program” as an effort to “accelerate the normal attrition process and the resulting cost savings.” Eligible employees who elect to depart will get a lump sum payment and “other compensation” tied to years of service.
The cull, which will plainly affect white collar jobs, comes amid a wave of layoffs in the US tech sector, where more than 100,000 people have been affected by a seemingly never-ending run of announcements. Challenger, Gray & Christmas reported 77,770 job cuts for February on Thursday, bringing the YTD total to 180,713. 21,387 of last month’s cuts were in tech.
GM will take a charge that could run to $1.5 billion in connection with the program. Virtually all of that will be incurred in the first half, according to a Thursday filing, which helpfully noted that “substantially all of these charges will be considered special for EBIT-adjusted, EPS-diluted-adjusted and adjusted automotive free cash flow purposes.”
That’s good news for investors, I suppose — you’re free to preemptively price a leaner, more profitable company, but you don’t have to worry about the associated charges in the here and now, because they aren’t “real” for the purposes of the adjusted measures Wall Street cares about.
I’m just joking. Sort of. The shares were actually lower in early trading.
GM last offered sweeping buyouts four years ago. US-based employees who qualify for the latest program will get a month’s pay for every year of service capped at 12 months, and some health coverage. Non-US employees will get their base salary and “incentives,” among other things.
If you ask GM, workers should give this a serious look. “Employees are strongly encouraged to consider the program,” a spokesperson told CNBC, adding that “by permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
I’m sure there’s a grim joke here about AI and white collar jobs to complement equally depressing quips about robots, automation and blue collar positions.
It wasn’t immediately clear how many people GM aimed to cajole, but the program apparently targets the “majority” if the company’s 58,000 US white collar employees. In total, the company had more than 80,000 salaried workers as of December 31, 2022.
Anyone who accepts GM’s offer and is approved will exit the vehicle (if you will) by the end of June.
2 thoughts on “GM Asks Salaried Employees To Step Out Of The Vehicle”
Al Dunlop has returned from the dead!
This sure doesn’t suggest a 6% terminal fed funds rate now does it? All those hawks screaming for more blood… 1/4 point is fine. Unless there is a really strong payroll number and very high cpi the Fed would be crazy to ratchet up again. See Milton friedman’s quip about an idiot in the shower…