Mary Barra, CEO, GM at the NYSE, November 17, 2022.
DETROIT – General Motors is cutting hundreds of salaried positions as it follows other major companies, including competitors, in downsizing headcounts to preserve cash and boost profits.
The cuts affect about 500 positions, according to a person familiar with the plans, which were announced internally Tuesday. They will be across various functions of the company, said the person, who asked not to be named because the plans are not public.
The timing of the cuts, which were first reported by The Detroit News, is odd. They come roughly a month after GM CEO Mary Barra and CFO Paul Jacobson told investors that the company was not planning any layoffs.
In a Tuesday letter viewed by CNBC, GM Chief People Officer Arden Hoffman confirmed the company’s goal of $2 billion in cost savings over the next two years, which “we’ll find by reducing corporate expenses, overhead, and complexity in all our products.”
The letter said the cuts, which follow performance evaluations, would impact a “small number of global executives and classified employees following our most recent performance calibration.” The cuts started Tuesday and will continue based on location.
The company reiterated in an emailed statement that the cuts are a result of performance, saying they will assist in “managing the attrition curve as part of our overall structural costs reduction effort.”
At the end of last year, GM employed about 86,000 hourly workers and 81,000 salaried employees worldwide. The 500 job cuts make up less than 1% of GM’s salaried workforce.
Jacobson told investors last month that the company expected to reduce employee headcount through attrition rather than layoffs.
Until recently, the automotive industry was largely unaffected by job cuts that had plagued the technology sector in recent quarters.
Ford Motor earlier this month confirmed it would cut 3,800 jobs in Europe over the next three years to adopt a “leaner” structure as it focuses on electric vehicle production. Others such as Rivian Automotive also made salaried cuts, while Stellantis said it would idle a plant in Illinois.