General Motors executives said Tuesday about 5,000 corporate employees have accepted voluntary buyout packages as part of a cost-cutting initiative that will allow the company to avoid companywide layoffs for the time being.
The Detroit-based auto giant expects to save about $1 billion in costs through the buyouts and an earlier round of about 500 layoffs announced in February, according to CEO Mary Barra.
“Through the VSP (voluntary separation program) we’ll have roughly 5,000 US salaried employees and global executives who are able to retire early or pursue other interests,” Barra said in the memo obtained by the Detroit Free Press.
“These results confirm that a company-wide Involuntary Separation Program is not a consideration at this point,” Barra added. “As always, leaders will continue to have the flexibility to manage their organizations to drive high performance and impact.”
GM shares were recently off 2% at $35.46.
The buyouts are unfolding as GM looks to slash $2 billion in operational costs over the next two years. A GM spokesperson said the company is confident it will realize at least 50% of those savings in 2023 and the full amount by the end of next year.
Employees who accepted the buyouts are expected to leave the company by the end of June.
GM Spokesman David Barnas confirmed the details in a statement to The Post.
“Given the results of the program, company-wide involuntary separations are not a consideration at this point,” Barnas said in the statement. “The steps we are taking will allow us to maintain momentum, remain agile, and create a more competitive GM.”
During a separate appearance at a Bank of America Securities conference, GM CFO Paul Jacobson said the number of buyouts matched internal expectations.
Jacobson also backed the view that the program would help the company to avoid a wider round of layoffs.
“I think we’re in a position where we’re gonna be able to do that,” Jacobson said at the event, according to CNBC.
The Post has reached out to GM for further comment.
The voluntary buyout offer was extended to most of GM’s 58,000-employee corporate workforce in the US, the outlet reported.
The offer was available for salaried workers with at least five years of service time as of June 30 of this year, or two years of service time for executive-level employees. Employees had until March 24 to sign up for the program.
GM is expected to provide more details about the buyout program during its first-quarter earnings call on April 25.
𝗖𝗿𝗲𝗱𝗶𝘁𝘀, 𝗖𝗼𝗽𝘆𝗿𝗶𝗴𝗵𝘁 & 𝗖𝗼𝘂𝗿𝘁𝗲𝘀𝘆: nypost.com
𝗙𝗼𝗿 𝗮𝗻𝘆 𝗰𝗼𝗺𝗽𝗹𝗮𝗶𝗻𝘁𝘀 𝗿𝗲𝗴𝗮𝗿𝗱𝗶𝗻𝗴 𝗗𝗠𝗖𝗔,
𝗣𝗹𝗲𝗮𝘀𝗲 𝘀𝗲𝗻𝗱 𝘂𝘀 𝗮𝗻 𝗲𝗺𝗮𝗶𝗹 𝗮𝘁 email@example.com