General Motors cuts 5,000 salaried jobs through voluntary buyouts

General Motors Co. is buying out 5,000 salaried staffers globally as part of a cost cutting move that will save $1 billion on an annual basis starting this year, according to Chief Financial Officer Paul Jacobson.

The voluntary buyouts cover 6 per cent of GM’s 81,000 white-collar employees and should allow the Detroit automaker to avoid involuntary dismissals, Jacobson said on April 4. The cuts should also deliver roughly half of the company’s broader goal of saving $2 billion a year and will result in a $1 billion charge in 2023, Bloomberg reports. 

“We were willing to pay for a voluntary program to do everything we can to avoid involuntary layoffs,” Jacobson said at Bank of America conference in New York. “We’re in a position where we’ll be able to do that.”

The automaker announced the buyout plan last month as it sought to avoid layoffs. Involuntary job cuts are “not a consideration at this point” as a result of the voluntary reductions, GM said on April 4 in a separate statement.

GM is trying to conserve cash as it spends $35 billion over the next several years to convert its lineup of internal-combustion vehicles to all-electric powertrains. The company plans to offer 30 electric models globally by 2025.

Jacobson said the company is also staying lean as a precaution against the risk of a potential economic downturn.