About 5,000 white-collar workers at General Motors took the company’s buyout offers, which the automaker says is enough to avoid layoffs at this time.
GM said Tuesday that the offers will save about $1 billion per year in costs, about half of the $2 billion it wants to cut annually by the end of 2024. The company now has about 58,000 salaried workers in the U.S.
“The steps we are taking will allow us to maintain momentum, remain agile, and create a more competitive GM,” the company said in a prepared statement.
GM hopes to get the remaining $1 billion in savings by reducing vehicle complexity and expanding use of shared parts on internal combustion and electric vehicles. It also plans to cut spending across the company, including for travel and marketing, the statement said.
Last month, GM offered buyouts to white-collar workers with at least five years of service, and global executives who have been with the company at least two years.
The decision to offer buyouts comes at an uncertain time for the auto industry, which is in the midst of a transition from internal combustion to electric vehicles. GM has a goal of selling only electric passenger vehicles by 2035.
The switch is requiring more research and development spending on both types of vehicles, as well as huge capital outlays for battery factories and updating assembly plants, as well as spending to get scarce metals needed for EVs.
Although the 5,000 workers who will leave is enough to hold off layoffs, GM isn’t ruling it out in the future. “Given the results of the program, companywide involuntary separations are not a consideration at this point,” the statement said.
Employees taking the buyouts had to sign up by March 24, and those who are approved for the packages have to leave by June 30.
U.S. salaried workers are being offered one month of pay for every year of service, up to 12 months. They’ll also get COBRA health care and part of the bonuses they would receive this year.