General Motors Co. on Thursday announced employee buyouts that are expected to lead to charges of $1.5 billion as the auto maker seeks to be “nimble in an increasingly competitive market.” GM’s
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stock slipped 2% after the news. The announcement comes a little over a week after the Detroit News reported that GM was cutting about 500 jobs, which came roughly a month after the company said it wasn’t planning layoffs.
“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market,” a GM spokesperson said. The buyouts, which the company is calling a voluntary separation program, are being offered to U.S. salaried employees with at least five years of service and to global executives with at least two years of service, GM said. The program offers employees “an opportunity to make a career change or retire earlier,” the company said. “Employees are strongly encouraged to consider the program.” GM said in late January that it planned to implement a program aimed at cutting costs by $2 billion per year by 2024. The buyouts are part of that effort, which also includes reducing vehicle complexity and cutting discretionary spending, GM said. U.S. employees taking the buyout would receive 1 month of pay for every year of service, up to 12 months, as well as COBRA benefits, a prorated performance bonus and help finding a new job. GM said it expects to record the bulk of the separation charges in the first half of 2023. The Wall Street Journal reported Wednesday that GM’s crucial pivot to electric vehicles had “stalled. …