General Motors will start laying off approximately 4250 salaried employees from Monday morning.
The Detroit News reports that the layoffs form part of a broad restructuring effort and that involuntary separations will continue through February. The carmaker will also cut contract jobs through January, potentially leading to a total of up to 8000 job losses. Among these job cuts will be those that see GM’s global executive workforce reduced by 25 per cent.
GM has yet to announce when executive job cuts will commence but told The Detroit News that it will communicate timing with its employees first.
Roughly 18,000 of GM’s 50,000 employees in North America were offered buyouts in October 2018. According to chief executive Mary Barra, approximately 2250 employees accepted the voluntary separation offer.
The comprehensive layoffs come shortly after the company started idling five of its manufacturing plants in North America in the hopes of saving $2.5 billion in 2019 and $6 billion by 2020. Among the plants being idled are the Detroit-Hamtramck Assembly site, Baltimore Operations, and Lordstown Assembly in Ohio.
The layoffs will start two days before GM announces its fourth quarter and full-year earnings for 2018. The automaker expects slightly higher earnings per share than the $5.80 to $6.20 initially forecast.
Responses to GM’s restructuring have been mixed. According to Morgan Stanley analyst Adam Jonas, consumers could end up paying more for GM products.
“Many investors see GM as a ‘self help story’ that can cut costs faster than the pace of industry headwinds, leaving margins and cash flow supportive of strong cash flow and return of capital. We do not subscribe to this view,” Jonas said.
“We believe cost savings will be given back to the consumer in price …, something with which this industry has numerous precedents.”
https://www.carscoops.com/2019/02/gm-start-laying-off-4250-employees-monday/