GM cutting hundreds of jobs to reduce costs

11:19 pm Tuesday, February 28th, 2023

By David Shepardson

(Reuters) -General Motors Co is cutting hundreds of executive-level and salaried jobs as it looks to cut costs and streamline operations, a person briefed on the matter told Reuters on Tuesday.

The global reductions are in the “low hundreds,” the person said.

GM Chief People Officer Arden Hoffman said in a letter to employees on Tuesday the Detroit automaker is “committed to $2 billion in cost savings in the next two years, which we’ll find by reducing corporate expenses, overhead, and complexity in all our products.”

GM disclosed the $2 billion cost cut target in January. The automaker said in January it did not plan layoffs and on Tuesday did not characterize the cuts as layoffs.

GM said the job action Tuesday “follows our most recent performance calibration and supports managing the attrition curve as part of our overall structural costs reduction effort.”

Hoffman said “in an environment where our competitors’ margins are improving, it’s imperative that we act now and focus on our own efficiency.”

Hoffman added that “to deliver on our commitments and to beat the competition, we need to have the winning team, bar none. We need a culture shift that enables us to hold ourselves accountable for achieving the higher levels of operating that are now required.”

GM shares closed down 1.5%.

Hoffman said “globally, employees and leaders will be equipped with options to address any issues with greater urgency, so we can achieve our boldest goals…. This is a fundamental cultural shift to be more performance-driven and accountable.”

Earlier this month, Ford Motor said it was cutting one in nine jobs in Europe, axing 3,800 roles in product development and administration as part of a drive to lower costs in the region and concentrate engineering know-how in the United States.

Stellantis and unions on Monday signed an agreement to cut up to 2,000 workers from the carmaker’s Italian operations this year through voluntary redundancies. On Tuesday, Stellantis indefinitely idled a plant in Illinois that employs about 1,350 workers.

(Reporting by David Shepardson in Washington and Kannaki Deka; Editing by Chris Reese, Lisa Shumaker and Kim Coghill)