General Motors has announced its plans to provide voluntary buyouts to its 58,000 US white-collar employees. The move comes as the company plans to reduce its structural costs by $2 billion over the next two years.
As reported by Reuters, Mary Barra, CEO, General Motors informed all the employees about this move through a letter on Thursday. The letter stated that all the employees (US salaried) will be eligible for the Voluntary Separation Program (VSP) as of June 30. Additionally, the plan will be available for workers who have spent a good five years with the company.
US employees who are qualified for the buyout will receive one month’s salary for every year worked up to a maximum of 12 months. Additionally, they will be offered COBRA health coverage, prorated team performance bonuses, and outplacement services. Global employees, on the other hand, will receive base salary, incentives, COBRA coverage, and help in finding new employment and transitioning into their new workplace.
In her letter, Barra also stated that the program’s purpose is to speed up the attrition process in the United States, which may help the company avoid involuntary job cuts in the future. This buyout offer follows the announcement made by the Detroit-based automaker last week that it would eliminate roughly 500 salaried positions worldwide.
As reported by CNBC, General Motors anticipates incurring a pre-tax expense of up to $1.5 billion related to the buyouts. The company stated that most of these expenses would be in cash and would occur during the first six months of the year.
Employees who are interested in the program and meet the eligibility criteria must apply by March 24, and if approved, they will leave the company by June 30.
Reportedly, General Motors provided a similar buyout program to approximately 18,000 salaried workers in North America during 2018-2019, the last time the company offered such a significant initiative.
