In January, General Motors (GM) declared that it would make $2 billion in savings without considering layoffs. Yet, it stated on Thursday that it was searching for employees to voluntarily resign.
The automaker stated in a regulatory filing that it planned to reduce expenses through attrition and a voluntary separation program in which qualified workers would get a lump sum payment and additional compensation based on how long they had worked for the business. The buyouts would cost the business $1.5 billion this year, before taxes.
As the automaker announces buyouts that will result in costs of $1.5 billion, GM’s stock declines by 2%.
A GM spokesperson told Market Watch, “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
According to a GM the voluntary separation program would be made available to all US paid employees with at least five years of service and global executives with at least two years of employment.
All salaried employees in the United States with a minimum tenure of five years as well as worldwide executives with a minimum tenure of two years will be eligible for these buyouts from GM. Salaried employees who accept the offer will also receive COBRA health insurance coverage along with one month of pay for each year of employment with the company (up to 12 months). The package includes base pay, bonuses, COBRA coverage, and access to outplacement services for executives who accept it.
The Wall Street Journal said Wednesday that GM’s crucial pivot to electric vehicles had “stalled.”
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