Detroit automaker General Motors (GM) is offering buyouts to the “majority” of its salaried U.S. employees and global executives, forecasting a pre-tax charge of up to $1.5 billion to cover the costs, the company announced Thursday.
The buyouts come as part of a “Voluntary Separation Program,” or VSP, that will help GM cut as much as $2 billion in fixed cuts, according to a public filing. The company did not release expectations for the number of employees it expects to accept the deal but currently retains around 58,000 salaried workers on its U.S. payroll.
GM said the majority of the charges are expected to be all-cash and occur during the first half of 2023. The decision was reportedly made to offer employees an opportunity to offboard before possible firings at a later date.
“Employees are strongly encouraged to consider the program,” the automaker said, according to a Reuters report. “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
The buyout program comes just a week after the Detroit automaker said it would terminate about 500 salaried positions globally.
Eligible employees interested in the voluntary program must notify the company by March 24, and those approved will leave GM by June 30.
Approved U.S. workers will be granted one-month pay for every year they worked up to 12 months, as well as COBRA health coverage, the company said. They also will receive prorated team performance bonuses and outplacement services. Global employees will receive a similar package, including incentives and health coverage.
GM is in the midst of an uncertain upheaval, a result of the rapidly shifting market aimed at electric vehicle homogeny. The historic American automaker has made its intentions clear however, announcing its goal of selling only electric passenger vehicles by 2035.
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