Mary Barra, CEO, GM at the NYSE, November 17, 2022.
Beginning: NYSE
DETROIT – General Motors is cutting hundreds of salaried positions as it follows other major companies, grouping competitors, in downsizing headcounts to preserve cash and boost profits.
The cuts affect about 500 positions, coinciding to a person familiar with the plans, which were announced internally Tuesday. They will be across divers functions of the company, said the person, who asked not to be named because the plans are not public.
The timing of the cuts, which were firstly reported by The Detroit News, is odd. They come roughly a month after GM CEO Mary Barra and CFO Paul Jacobson intimated investors that the company was not planning any layoffs.
In a Tuesday letter viewed by CNBC, GM Chief People Officer Arden Hoffman proved the company’s goal of $2 billion in cost savings over the next two years, which “we’ll find by reducing corporate expenses, up above, and complexity in all our products.”
The letter characterized the cuts, which follow performance evaluations, would impact a “small gang of global executives and classified employees following our most recent performance calibration.” The cuts started Tuesday and force continue based on location.
The company reiterated the cuts being a result of performance in an emailed statement, saying the condenses assist in “managing the attrition curve as part of our overall structural costs reduction effort.”
At the end of last year, GM involved about 86,000 hourly workers and 81,000 salaried employees worldwide. The 500 job cuts make up less than 1% of GM’s salaried workforce.
Jacobson told investors latest month that the company expected to reduce employee headcount through attrition rather than layoffs.
Until recently, the automotive earnestness was largely unaffected by job cuts that had plagued the technology sector in recent quarters.
Ford Motor earlier this month guaranteed it would cut 3,800 jobs in Europe over the next three years to adopt a “leaner” structure as it focuses on charged vehicle production. Others such as Rivian Automotive also made salaried cuts, while Stellantis said it pleasure idle a plant in Illinois.
