GM to make more job cuts, trim costs with voluntary separation offers

Jamie L. LaReau, Detroit Free Press
·2 min read

About a week after General Motors unexpectedly cut several hundred jobs to help it trim costs and form a top-tier workforce to guide its transition to an all-electric car company, CEO Mary Barra told employees Thursday morning that there will be more job eliminations to come — this time voluntary.

In the memo, obtained by the Free Press, Barra told employees that GM will offer a voluntary separation program to all U.S. salaried employees with five or more years of service, and to all global executives with two or more years with the automaker. The memo said the idea is to “accelerate attrition" and, she wrote, "taking this step now will avoid the potential for involuntary actions" in the future.

The Renaissance Center in downtown Detroit sits in the background along the Detroit RiverWalk on March 11, 2021.
The Renaissance Center in downtown Detroit sits in the background along the Detroit RiverWalk on March 11, 2021.

GM will release the details of the packages to qualified salaried employees later Thursday, but shared some of it with the Free Press as listed below. The employees will have until March 24 to take the package. The memo said GM Korea will offer a voluntary separation package to be communicated locally and GM International will continue with "limited business optimization and performance management as required." The program is not being offered to employees in Canada, Europe, Mexico or China, the memo said.

GM spokesperson David Barnas confirmed the contents of the memo saying it is "part of our plan to accelerate attrition and achieve $2 billion in cost savings by the end of 2024." He did not provide a target number as to how many voluntarily separations GM hopes to get.

As the Free Press first reported on Feb. 28, GM cut several hundred jobs from its global salaried workforce of 81,000 that day.

In the aftermath of those cuts, some white-collar employees said they feel betrayed by top leaders because GM CFO Paul Jacobson promised Wall Street in January there would be no layoffs at the automaker even as he announced cost savings were coming. GM defends the move saying the cuts were not layoffs, but rather performance-based separations.

More:GM Proving Ground in Milford is full of secrets — and few employees get to see it

Barnas said the voluntary separation program is part of GM's efforts to accelerate fixed cost reduction efforts, which include:

  • GM wants to reduce vehicle complexity and expand the use of shared systems between its internal combustion engine and future electric vehicle programs.

  • GM is focusing investment in growth initiatives to accelerate near-term benefits.

  • GM is reducing salaried staff through attrition, primarily in the U.S.

  • All U.S. salaried employees with at least five years of service are eligible for one month pay for every year of service up to 12 months and COBRA health care benefit. They will get a pro-rated performance bonus and access to outplacement services.

  • All global executives with at least two years of service are eligible for a package which includes their base salary, incentives, COBRA and outplacement services.

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber

This article originally appeared on Detroit Free Press: GM to cut jobs, trim costs with voluntary separation offers