GM cuts salaried jobs and more could come as it views 2023 as critical year

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General Motors is cutting several hundred salaried jobs across the globe, most in the United States, as it looks to flawlessly launch several new electric vehicles this year in a bid to gain new market share in the increasingly competitive space.

The automaker also plans to cut $2 billion from its costs over the next two years, and this will be part of that cost reduction.

On Wednesday, the automaker informed employees of the job cuts in a memo obtained by the Free Press. In it, GM Chief People Officer Arden Hoffman said: “To deliver on our commitments and to beat the competition, we need to have the winning team, bar none. We need a culture shift that enables us to hold ourselves accountable for achieving the higher levels of operating that are now required.”

Hoffman said GM has already made changes around its performance measurements to include “more frequent conversations between leaders and employees” and that it is looking at all the ways to boost efficiency and performance.

“This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration,” Hoffman wrote. “They will be departing the company starting from today.”

GM recently told Wall Street that 2023 will be GM’s breakout year as it works to establish itself in the EV marketplace with several new launches including the 2024 Silverado EV and Sierra EV as well as all-electric midsize SUVs. GM CEO Mary Barra outlined how she plans for GM to have leading profit margins in EVs, which are currently not very profitable due to the high cost to make the batteries for them.

GM spokeswoman Maria Raynal declined to say how many salaried employees are being let go or provide any specifics on who is being fired. But a person familiar with the cuts, who asked to not be identified because they were not authorized to share information publicly, said it is “far less than 5% of salaried employees.” It is not a big enough number to be considered a “material” change that requires GM to file notice with the Securities and Exchange Commission, the person said.

In the U.S., GM has about 53,000 salaried workers and, globally, it has about 69,000, according to GM government filings. The person also said the cuts are across all GM departments and facilities in the United States and globally.

The person stopped short of saying these would be the only cuts this year, noting that GM has said its cost cuts will occur over the next two years. GM has also said it is limiting hiring to the most strategically important roles and will use attrition to manage overall headcount.

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Some of the cuts happened before Wednesday. At GM’s Wentzville Assembly plant in Wentzville, Missouri, about seven group leaders were “walked out of the plant” Tuesday night, two people familiar with GM’s decision told the Free Press. They are not authorized to speak to the media and asked to not be named.

About a week ago, three others were let go for various reasons, the people said. A group leader is a salaried worker who heads a team responsible for a specific area such as seat installation. GM makes its small pickups — the Chevrolet Colorado and GMC Canyon and the Chevrolet Express and GMC Savana vans — at Wentzville.

Most of the employees who will be let go in the United States have already been informed, the person said. Those employees will receive a severance package, which varies based on seniority. Employees who work outside the United States will be compensated according to the laws of their respective countries.

But GM CFO Paul Jacobson had promised there would be no layoffs at the automaker during GM’s fourth-quarter and year-end earnings call, but he did say GM planned to achieve $2 billion in cost savings in the automotive business over the next two years.

“The areas we’re focusing on include continuing to reduce complexity in all of our products and reducing corporate overhead expenses across the board,” Jacobson said. “I do want to be clear, though, we’re not planning layoffs. We are limiting our hiring to only the most strategically important roles and will use attrition to help manage overall head count.” 

The person familiar with the cuts said 2023 is a crucially important year for GM and leaders are preparing for a more competitive environment. GM will start production of the 2024 Chevrolet Equinox EV and Blazer EV this year. Those are key vehicles to reach mass market EV adoption because the Equinox EV will start around $30,000 and the Blazer EV at $44,995, pushing it upmarket from where its gasoline-powered counterpart starts now at $34,800. GM currently sells the Chevrolet Bolt and Bolt EUV, both priced under $30,000 but on an older propulsion system than GM’s newer EVs. On its new propulsion system, Ultium, GM sells the GMC Hummer EV pickup and SUV and the Cadillac Lyriq.

As Hoffman noted in her memo about the job cuts: “This is a fundamental cultural shift to be more performance-driven and accountable. It’s clear our team is very strong, we have the right growth strategy, product portfolio, and vision.”

Contact Jamie L. LaReau: Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.

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