General Motors is unexpectedly terminating 500 staff members after concluding a round of performance evaluations.
These terminations seemingly conflict with recent statements made by the brand’s leadership. In January, CFO Paul Jacobson detailed a plan to cut costs and save an additional $2 billion, but noted that the brand was “not planning layoffs.” Although small staff reductions were anticipated, he claimed these would be the result of attrition.
According to reports by CNBC and The Detroit News, a letter written by Chief People Officer Arden Hoffman was sent to employees on Tuesday explaining that the job cuts were the result of performance evaluations, and only affected a “small number of global executives and classified employees.” Hoffman also wrote that GM was “looking at all the ways of addressing efficiency and performance,” and that the company’s goal was to reduce “corporate expenses, overhead and complexity in all [GM] products.”
Although the 500 positions made up 0.6% of its total workforce, GM still joins a small number of automotive companies reducing labor costs in 2023. Halfway through February, Ford also announced plans to fire 3,800 employees in Europe to address “rapidly changing market conditions.” Nevertheless, in comparison to the technology sector’s massive early year layoffs, workers at most OEMs have nevertheless enjoyed relatively stable careers. Unfortunately, as electric vehicles continue to chip away at the industry’s collective wallet, this could soon change. Despite an expenditure forecast between $11 billion and $13 billion, GM still hopes to bring in $10.5 billion to $12.5 billion in adjusted earnings. To this end, it may decide that further terminations are necessary.
