General Motors CEO Mary Barra speaks with the media prior to the start of the 2017 General Motors Annual Shareholders’ Meeting on Tuesday, June 6, 2017 at GM’s global headquarters in Detroit, Michigan.
Photo by John F. Martin for General Motors
DETROIT — General Motors will offer voluntary buyouts to a “majority” of its 58,000 white-collar employees in the United States, as it aims to cut $2 billion in structural costs over the next two years, according to a letter sent to workers Thursday from the president. Executive Mary Barra. .
The Voluntary Separation Program, or VSP, will be offered to all US salaried employees who have spent five or more years with the company starting June 30. Outside the United States, the automaker will offer buyouts to executives with at least two years of time at the company.
GM expects to charge up to $1.5 billion in pre-tax fees related to the acquisitions, according to a Public filing Thursday. GM said the majority of the charges are expected to be all-cash and occur during the first half of the year.
In his Thursday letter, Barra said the program was “designed to accelerate tapering in the United States,” to help the company avoid “involuntary actions” in the future. The purchase offer comes after the Detroit automaker said last week that it would end about 500 salaried jobs globally.
The last time GM offered such a massive salaried employee buyout program was in 2019.
“Employees are strongly encouraged to consider the program,” GM said in an emailed statement to CNBC Thursday. “By permanently reducing regulated costs, we can improve vehicle profitability and remain adept in an increasingly competitive market.”
GM announced its $2 billion cost-cutting program in January, saying between 30% and 50% of the savings were expected through 2023. At the time, executives said they planned to cut staff through attrition rather than layoffs.
US employees who are approved for the acquisition will be given one month’s pay for each year they worked for up to 12 months, in addition to COBRA health coverage. They will also receive prorated team performance bonuses and external placement services. Global employees will receive a base salary, incentives, COBRA services, and outsourcing.
Eligible employees interested in the program must register by March 24. Those who choose to take a voluntary package and are approved will leave by June 30.
A spokeswoman for the company declined to say how many employees the company is targeting to accept acquisition packages. At the end of last year, General Motors employed about 81,000 paid employees worldwide, according to public filings.
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