General Motors (GM) chief people officer, Arden Hoffman, announced on Tuesday that the Detroit-based automaker is committed to cost savings of $2 billion in the next two years. This will be achieved through the reduction of corporate expenses, overhead, and complexity across all their products.
GM’s move comes amid a series of cost-cutting efforts by automakers globally, as they face pressure from a slowdown in demand and increased competition.
These cuts were initially reported by the Detroit News and were disclosed by GM in January. However, the automaker did not plan on any layoffs at that time and did not characterise the recent cuts as such.
Hoffman stated that the job action taken on Tuesday follows the most recent performance calibration and supports managing the attrition curve as part of GM’s overall structural cost reduction effort. She stressed the importance of efficiency, stating, “In an environment where our competitors’ margins are improving, it’s imperative that we act now and focus on our own efficiency.” Furthermore, she emphasised the need for a culture shift that enables GM to hold itself accountable for achieving higher levels of operating that are now required to beat the competition.
Ford Motor recently announced that it will be reducing its workforce in Europe by cutting one in nine jobs, which translates to 3,800 positions in product development and administration. This strategic move is aimed at reducing costs in the region and consolidating engineering expertise in the United States.
