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GM Offers US Employees Buyouts to Cut Costs

March 10, 2023
In January, GM announced it would attempt to cut operating costs by $2 billion before 2025.

Multiple outlets have now reported that General Motors is offering voluntary buyouts to U.S. employees of the Big 3 Detroit automaker as it continues an ongoing push to cut costs. Fox 2 Detroit broke the story Thursday, March 9 after receiving a letter sent to GM employees announcing the buyouts.

According to Fox, GM is offering the buyout to all U.S.-based GM employees with at least five years of service as of the end of June as well as global executives with at least two years at the company.

Though the letter didn’t include an exhaustive list of benefits in the buyout packages, the Detroit Free Press reported that salaried employees would receive up to one month of pay for each year of service up to a maximum of 12 months’ pay, COBRA health care benefits, a prorated performance bonus and “access to outpatient services.”

GM plans to offer a similar program for its Korean operations, the Press reported, but GM employees in Canada, Europe, Mexico or China will not receive buyout offers.

The buyouts—meant to increase attrition—come as the legacy automaker is looking to reduce costs during its transition to electric vehicles. In January, GM CFO Paul Jacobson announced the company would try to cut $2 billion from the company’s costs by 2025, with 30-50% of the expenses cut to be announced in 2023.

At the time, Jacobson promised GM wouldn’t be using layoffs to cut costs, though the company did cut several hundred employees at the end of February: According to the Detroit Free Press, which covered the lost jobs, GM characterized the cuts as related to quality concerns.

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