Mary Barra, CEO, GM at NYSE, November 17, 2022.
Source: NYSE
DETROIT – General Motors cutting hundreds of salary positions as it follows other major companies, including rivals, in downsizing headcounts to conserve cash and boost profits.
The cuts affect about 500 positions, according to people familiar with the plans, which were announced internally Tuesday. They will go through various corporate functions, said the person, who asked not to be named because the plans are not public.
The timing of the cut, first reported by The Detroit News, is strange. They come about a month after GM CEO Mary Barra and CFO Paul Jacobson told investors that the company is not planning layoffs.
In a Tuesday letter seen by CNBC, GM Chief People Officer Arden Hoffman confirmed the company’s goal of $2 billion in cost savings over the next two years, which “will be achieved by reducing corporate costs, overhead, and complexity across all of our products.”
The letter describes the cut, which follows a performance evaluation, will result in “a small number of global executives and classified employees after the latest performance calibration.” The cuts began Tuesday and will continue based on location.
The company attributed the cuts to performance in an emailed statement, saying the cuts helped “manage the attrition curve as part of an overall structural cost reduction effort.”
At the end of last year, GM employed 86,000 hourly and 81,000 salaried employees worldwide. The 500 job cuts are less than 1% of GM’s salaried workforce.
Jacobson told investors last month that the company expected to reduce the number of employees through attrition rather than layoffs.
So far, the auto industry has been largely unaffected by the job cuts that have plagued the tech sector in recent quarters.
Ford Motor District earlier this month it was confirmed that it will cut 3,800 jobs in Europe over the next three years to use a “leaner” structure as it focuses on the production of electric vehicles. Others such as Rivian Automotive also made salary cuts, when Star said it will idle the plant in Illinois.
