In a concerted effort to cut costs, General Motors has offered upwards of 18,000 voluntary buyouts to salaried employees with 12 years of experience (or more) in North American operations. To put this in perspective, GM hired 17,000 workers (salaried and hourly) over the past two years; and 40 percent of its 67,000 full-time salaried workers have come on board in the last five years.
The company describes this somewhat shocking move as a proactive strategy to redirect focus on electric cars and autonomous vehicles in future fleets. Also, the automaker continues to anticipate slowing sales in both North America and China, higher commodity prices, and tariffs.
But while this move is a major one it is not entirely unexpected. Over the past four years or so, GM has been undergoing a bit of a transformation: abandoning expensive ventures (the Opel brand, in Europe) in favor of electric and autonomous vehicles. And in just the past 3 years alone, the automaker has been on track to cut $6.5 billion by the end of this year.
And the cost-cutting effort parallels investment efforts that are aimed at acquiring and developing the technology they will need for the electric and autonomous vehicles of the future. For one, GM acquired Cruise Automation in 2016, for $1 billion. Also, they had promised to invest an additional $1.1 billion to support its self-driving partnership efforts with Softbank.
General Motors has also revealed their plans to launch 20 brand new electric vehicles by 2023, as well as up production output on the popular Chevy Bolt. All of this appears to be greatly supported by GM’s recent trend for hiring software engineers, expanding its battery lab, and building a new LG Electronics lab in Michigan.
So far, General Motors has not indicated a target in regards to how many of these salaried employees they hope will take the offer. Still, GM spokesperson Pat Morrissey comments that this sort of offer typically has a low take rate. And, of course, the company will probably look to re-evaluate another such program in the coming months, depending on how many (or few) take the offer.