General Motors is cutting an unspecified number of white-collar jobs globally, part of its announced efforts to slash costs to remain competitive in the shift to electric vehicles.
“We are looking at all the ways of addressing efficiency and performance,” said Arden Hoffman, the company’s chief people officer, in a message to staff Tuesday. “This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration. They will be departing the company starting from today.”
A person familiar with the plans said the job cuts would affect a few hundred employees. GM has 58,000 salaried US-based staff and 46,000 US unionized hourly workers, making up the majority of its 167,000 employees worldwide.
GM just reported a record annual profit for 2022. At that time it announced plans to reduce costs by $2 billion over the next two years, including cutting corporate overhead across the board. But at that time CEO Mary Barra told investors, “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.”
Hoffman’s statement to staff said these job cuts are part of “a fundamental cultural shift to be more performance-driven and accountable.”
GM is spending a significant amount of money to shift production from traditional gasoline-powered vehicles to a lineup of pure electric vehicles. While that will eventually reduce labor costs since EVs don’t take as many hours of labor to produce, it does require billions of dollars in upfront investment. GM has said it will invest $35 billion between now and 2025 in the shift to EVs. Its target is to have an all EV lineup of passenger vehicles by 2035.
Rival Ford, which is also facing the cost of converting to a lineup of EVs, has been making much deeper job cuts in recent months, including axing 3,000 salaried roles announced in August; as well as cutting 3,800 jobs across Europe, announced earlier this year.
(F) and GM
(GM) face contract negotiations with the United Auto Workers union this fall on new labor deals for their US hourly workers. The union went on strike at GM
(GM) for six weeks in 2019 before reaching a deal on its current contract.