After reporting a better-than-expected third quarter, General Motors is being “proactive” and offering voluntary buyouts to about 18,000 salaried employees in North America.
The offer is being extended to workers with 12 years or more experience and are designed to get ahead of rising costs, particularly in China. Employees were informed via a newsletter emailed Wednesday.
The automaker reported a net profit of $2.53 billion during the July-to-September quarter, or $1.75 a share. A year ago, it lost $2.98 billion, or $2.03 a share, though that figure largely reflected the cost of completing the sale of its European-based Opel subsidiary to France’s PSA Group.
“We are doing this while our company and economy are strong,” the company said in an emailed statement. “The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency.”
(GM handily beats earnings forecasts, buoyed by truck sales. Click Here for the story.)
For now, the buyouts are voluntary, but if the company doesn’t get the numbers it wants, GM may terminate employees. Neither the target number of employees nor what it will cost to implement the program has been revealed.
“We will evaluate the need to implement after we see the results of the voluntary program and other cost reduction efforts,” GM said.
The 18,000 eligible workers account for more than third of the company’s North American salaried employees. They have until Nov. 19 to agree to the buyout.
(Click Here for more about Ford’s restructuring plans.)
It appears to be the season for buyouts as Ford has been shedding white-collar employees in North America as well. The goal is to get the company’s salaried workforce below the 70,000 mark. The move is part of an $11 billion restructuring plan implemented by CEO Jim Hackett.
Hackett didn’t specify how many employees the company was looking to cut, but he did say that the efforts to do so wouldn’t begin until the second quarter of 2019.
It’s not just the large automakers using buyouts or terminations to cut employees. California-based EV maker Faraday Future laid off a sizable number of its approximately 1,300 employees last week as it struggled to find enough cash to continue operating.
(To see more about Faraday Future’s struggles, Click Here.)
The company is planning a second round of layoffs as it fights for its life. The company’s co-founder, Nick Sampson, saying the company is “effectively insolvent.” Two years ago, Volkswagen AG targets employee cuts of 30,000 as it look to gain efficiencies.