Mary Barra, CEO, GM at the NYSE, November 17, 2022.
Source: NYSE
DETROIT – General Motors is cutting hundreds of salaried positions as it follows other large companies, including competitors, in reducing headcounts to conserve cash and increase profits.
The cuts will affect about 500 positions, according to a person familiar with the plans, which were announced internally on Tuesday. They will be across the different activities of the company, said the person, who asked not to be named because the plans are not public.
The timing of the cuts, first reported by The Detroit News, is strange. They come about a month after GM CEO Mary Barra and CFO Paul Jacobson told investors the company was not planning any layoffs.
In a Tuesday letter viewed by CNBC, GM People Chief Arden Hoffman reiterated the company’s goal of $2 billion in cost savings over the next two years, which we will find “by reducing physical costs, overhead costs overhead and complexity of all our products. “
The letter indicated the cuts, which come after performance evaluations, would affect “a small number of global executives and classified employees following our most recent performance calibration.” The cuts began on Tuesday and will continue depending on location.
The company reiterated that the cuts were due to performance in an emailed statement, saying the cuts help “manage the attrition curve as part of our overall structural cost drive” to reduce “
At the end of last year, GM employed about 86,000 hourly workers and 81,000 salaried workers worldwide. The 500 job cuts make up less than 1% of GM’s salaried workforce.
Jacobson told investors last month that the company planned to reduce the number of employees through attrition rather than layoffs.
Until recently, the automotive industry was largely unaffected by the job cuts that have plagued the technology sector in recent years.
Ford Motor confirmed earlier this month that it would cut 3,800 jobs in Europe over the next three years to adopt a “leaner” structure as it focuses on electric vehicle production. Others are like Rivian Automotive also made salary cuts, am Stellantis he said it would be useless to plant in Illinois.
