GM’s Voluntary Buyout Reflects Broader Economic Difficulties

Allen Smith, J.D. By Allen Smith, J.D. March 9, 2023

​The announcement by General Motors (GM) on March 9 that it was offering a voluntary buyout for most of its salaried workers could indicate that economic woes have spread to sectors beyond technology, to include manufacturing. We've gathered articles on the news from SHRM Online and other outlets.  

Majority of Company's White-Collar Employees Offered Buyout

GM will offer voluntary buyouts to the majority of its 58,000 U.S. white-collar employees, according to a letter sent to workers from CEO Mary Barra. The company is seeking to cut $2 billion in structural costs over the next two years. The voluntary separation program will be offered to all U.S. salaried employees who have been with the company for five or more years as of June 30. Outside the U.S., the company will offer buyouts to executives with at least two years' tenure.

U.S. employees approved for the buyout will get one month of pay for every year they worked up to 12 months of pay, as well as COBRA health coverage. They also will receive prorated team performance bonuses and outplacement services.


GM Recently Cut Jobs

GM also recently cut approximately 500 salaried employees. "In an environment where our competitors' margins are improving, it's imperative that we act now and focus on our own efficiency," Arden Hoffman, GM's HR chief, wrote in a memo Feb. 28. "We need a culture shift that enables us to hold ourselves accountable for achieving the higher levels of operating that are now required."

 (The Wall Street Journal)

Layoffs Surge Nationwide

GM's announcement comes as layoffs at U.S. companies have spiked in the past two months, reaching their highest level since 2009. The technology sector has accounted for more than a third of job cuts announced nationwide. Health care announced the second-highest number of cuts, followed by retail, financial and fintech. So far this year, employers have announced plans to cut 180,713 jobs, up 427 percent from the 34,309 cuts announced in the first two months of 2022.

(Reuters and Challenger, Gray & Christmas)

Fall in Job Openings Reflects Expected Slowdown

Job openings fell by over 400,000 in January to 10.8 million, according to the monthly JOLTS report released by the U.S. Bureau of Labor Statistics. The report shows the first sign of the long-anticipated slowdown in the demand for workers as employers become more cautious about a potential recession. The number of available jobs remains historically high, however, and outnumbers unemployed workers by approximately 5 million.

(SHRM Online)



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