General Motors has recently offered voluntary buyouts to about 18,000 of its salaried employees in North America, who have a minimum experience of 12 years. The vehicle manufacturer is apparently looking to lower its costs while investing in its electric and autonomous future.
The company has explained this move to be a proactive measure, as it looks to be prepared for the upcoming challenges it could face. These include slow sales in China and North America, tariffs as well as commodity prices.
Over the last four to five years, General Motors has seemingly been engaged in a transforming its business. It is investing more into electric and autonomous vehicle technology and shedding programs that are costly and losing money, like the Opel brand in Europe.
According to a GM spokesperson, among the 50,000 employees of the company in North America, about 36 percent are eligible for the buyout. The spokesperson declined to give out the exact number GM anticipates will accept the buyout, but it predicts that it is unlikely the number would be anywhere close to 18,000.
The automaker has supposedly given a deadline of Nov 19 to the employees for deciding if they want to take the buyout offer. Reportedly, those employees who accept the offer will be provided severance from Feb 1, 2019.
Records indicate that the company has been on a mission to cut $6.5 billion in costs over three years and it expects to reach that target by this year end. Dhivya Suryadevara, CFO of General Motors, mentioned in the company’s recent earnings call that the company had made $6.3 billion in cost-saving steps by the end of third quarter.
Purportedly, the cost-cutting measures of the automaker was in line with its commitments and investments towards electrification and autonomous technology. As a part of a bigger deal with SoftBank, the automaker had announced earlier in the year that it would invest $1.1 billion into its self-driving unit.