GM offers salaried employee buyouts, will take up to $1.5bn charge

WASHINGTON: General Motors Co on Thursday said it was offering buyouts for most of its salaried employees and global executives and expects to take a pre-tax charge of up to $1.5 billion to cover the costs.

The announcement comes as layoffs by US companies in the past two months touch their highest since 2009, with the tech sector accounting for more than a third of the over 180,000 job cuts announced.

The largest US automaker in January disclosed a $2 billion cost cut target, including reducing employment through attrition.

Under the terms of the staff reduction plan, all US salaried employees with at least five years of service and all global executives with at least two years of service will be offered lump sum payments and other compensation to exit the company, GM said.

“Employees are strongly encouraged to consider the program,” the automaker said. “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.” It expects to take the bulk of the charge in the first half of 2023.

GM, whose share fell about 1%, had 58,000 salaried employees at the end of 2022.

Eligible employees interested in the voluntary program must sign up by March 24 and those agreeing will leave GM by June 30.

The buyouts are separate from job cuts the company made last month.

A GM executive in February said the company was cutting hundreds of executive-level and salaried jobs. Peer Ford Motor Co said it planned to eliminate 3,800 product development and administration jobs in Europe in the next three years.