About 5,000 people have signed up for General Motors Co.’s buyout offer, CFO Paul Jacobson said during a BofA Securities Inc. presentation Tuesday.
The automaker announced a voluntary separation program for most of its U.S. salaried employees in early March. GM employs about 58,000 salaried workers in the United States. Eligible employees had to sign up by March 24. The move is part of a $2 billion cost-savings program GM announced earlier this year. Jacobson said the number of buyouts will lead to about a $1 billion charge for the company in the first quarter.
“I would say the voluntary program came in about in line with our expectations,” he said.
GM spokesperson David Barnas said “given the results of the program, company-wide involuntary separations are not a consideration at this point. The steps we are taking will allow us to maintain momentum, remain agile, and create a more competitive GM.”
As a result of 5,000 employees accepting GM’s buyout offer, the automaker will achieve about $1 billion of cost savings so it can realize at least 50% of its targeted savings for this year and achieve at least $2 billion of savings in 2024.
Also as part of the cost-cutting measures, in late February the Detroit automaker said it was cutting about 500 executive-level and salaried jobs. The news came a month after CEO Mary Barra said General Motors Co. was “not planning layoffs.”
After reporting record pre-tax earnings of $14.5 billion for 2022, GM leaders told investors in late January it would look to cut $2 billion in cost savings through attrition and other methods including lowering the “complexity in all of our products and reducing corporate overhead expenses across the board,” Jacobson told investors at the time.
GM previously would not disclose its targets for the voluntary severance package.
Through the buyout program, employees with at least five years of service at GM are eligible to receive one month of pay for every year of service up to 12 months, a pro-rated performance bonus and outplacement services. And global executives with at least two years of service are eligible for a package that will include a base salary, incentives and outplacement services. Both groups will also have access to COBRA health care benefits.
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