GM Offers Voluntary Separation Program to Reduce Costs and Achieve Savings
General Motors (GM) is offering a voluntary separation program to its employees in an effort to reduce costs and achieve $2 billion in savings by the end of 2024. The program, which GM is calling a Voluntary Separation Program (VSP), is available to all U.S. salaried employees with at least five years of service and all global executives with at least two years of service, and offers employees the opportunity to make a career change or retire earlier.
“This Voluntary Separation Program, known as a VSP, presents an opportunity to explore a new industry, make a career change, further a personal business venture or decide you can retire earlier,” GM CEO Mary Barra said in a memo. The company is offering three different packages to employees, based on level and service to the company.
GM is targeting a reduction in corporate overhead expenses across the board and limiting its hiring to only the most strategically important roles. The automaker is also rolling out production of electric versions of the Chevrolet Silverado, Blazer and Equinox. GM plans to make EVs a major part of the business going forward, launching vehicles such as the Chevrolet Silverado EV, Blazer EV, and Equinox EV.
Eligible employees have until March 24 to accept the buyout offer, and once approved, will leave the company by June 30. Employees who accept the offer will be granted one-month pay for every year they worked up to 12 months, as well as COBRA health coverage, prorated team performance bonuses and outplacement services. Employees at the global level will be given a base salary, incentives, COBRA coverage, and an outplacement service.
The buyouts are part of GM's plan to reach $2 billion in cost savings by the end of 2024, and assist the company in potentially avoiding “involuntary actions” in the future. GM is not disclosing a target goal for buyouts, but they are designed to accelerate attrition in the U.S. The buyout offer comes after the Detroit automaker said last week it would terminate about 500 salaried positions globally.
Ford recently announced plans to cut 3,800 jobs in Europe as part of a broader effort to revitalize its Europe business amid “rapidly changing market conditions” and an increasingly competitive EV market.
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