General Motors cut around 500 salaried jobs in the first week of March to reduce costs. Apparently, this one act could potentially save the car company $2 billion by 2026. Fortunately, the 500 cuts represent only about 1% of GM’s salaried payroll. Last year, GM rostered 81,000 salaried employees globally; and 86,000 hourly employees. Layoffs will be based on both location and recent performance reviews.
Indeed, GM Chief People Officer Arden Hoffman has explained the cuts follow their most recent performance assessment. Commenting on the $2 billion, Hoffman details a plan to lower overhead and expenses and attempt to understand product complexity better. The cuts will pertain to a “small number of global executives” and some classified employees. Specifically, Hoffman notes the team is already working to improve efficiency and performance. In the meantime, GM employees and leaders will also be equipped to tackle any issues with expediency and confidence.
GM CEO Mary Barra asserts that a major company objective is to reduce product complexity and corporate overhead. She clarifies the goal is focused more on strategic hiring and that any attrition will fundamentally serve to reduce the overall headcount. Furthermore, she notes reaching higher levels of operation in today’s competitive environment will require improved accountability.
The note also commented that General Motors currently has a handful of vehicle launches planned worldwide by the end of 2023. This expansion effort aims to keep GM competitive in the current market.
The news comes at a most interesting time: General Motors just reported its annual profit statement for 2022. On top of that, GM has not been discreet about shifting production away from traditional petroleum gasoline-powered cars to a new fleet of electric vehicles. Recent estimates suggest GM could spend $35 billion by 2025 in that EV shift. As a matter of fact, General Motors has set a guideline to offer a competitive passenger EV lineup by 2035.
The news also comes around the same time that Ford has expressed concern over the cost of shifting to electric vehicles. In fact, Ford has also cut some jobs–upwards of 3,000 salaried positions–in August alone. They also cut nearly 4,000 jobs in Europe earlier this year. All of this suggests the issues may be deeper and more complicated.
