GM cuts 1,000 jobs globally, mostly salaried but some hourly, in move to gain efficiency

Posted by Admin November 15, 2024 Jobs

General Motors cut about 1,000 salaried and hourly employees early Friday morning as part of the new salaried employee ranking system as well as a “normal course of business” to achieve better operating efficiency.

The latest GM job cuts span its global facilities across multiple departments, said a person familiar with the situation who asked to not be identified because they are not authorized to share this information with the public. Most of the 1,000 jobs that were eliminated were salaried people assigned to GM’s Global Technical Center in Warren. But a small number were hourly employees, some of whom were union-represented. The person said the UAW was notified.

GM employed about 163,000 people worldwide as of Dec. 31, according to its 2024 annual report, though that figure has decreased since then.

GM spokesman Kevin Kelly confirmed the cuts and sent this statement to the Detroit Free Press:

“In order to win in this competitive market, we need to optimize for speed and excellence. This includes operating with efficiency, ensuring we have the right team structure, and focusing on our top priorities as a business. As part of this continuous effort, we’ve made a small number of team reductions. We are grateful to those who helped establish a strong foundation that positions GM to lead in the industry moving forward.”

A request seeking comment from the UAW was not immediately answered.

This is the second round of job cuts at the automaker within a matter of months. In August, as the Detroit Free Press reported, GM eliminated nearly 1,500 from its software division globally, with 634 of the jobs being cut coming from its Technical Center.

One employee, who worked multiple decades at GM, said told the Detroit Free Press on Friday he received an email in the early morning hours that started with, “We are facing the difficult decision to say goodbye to some of our colleagues.” It referenced simplifying the business, but did not offer him a reason for his specific termination or details about severance pay. He asked to not be named due to the sensitivity of the situation and not yet getting a severance package, but he said he had years of top-rated performance reviews so he’d be shocked to learn if he was let go due to his performance.

The person familiar with GM’s job cuts said those who have been let go will receive severence pay based on their years of service and any other legal requirements in their region. This person said some of those let go “were a result of the new ranking system, but the rest was because of the normal course of business, to make sure you have people in the right places and doing the right thing. GM worked with the team leaders.”

In August, as the Free Press first reported, GM announced changes to its salaried employees performance evaluation system and bonus plan. GM said it was moving from a three-point to a five-point performance rating scale effective for the year-end performance review cycle, which typically starts in November.

As part of the new plan, GM expects each organization’s manager to rate 5% of their team as significantly exceeds expectations, 10% as exceeds expectations, 70% achieves expectations, 10% partially meets expectations and 5% who do not meet expectations. For the 5% who do not meet expectations, GM wrote in an email at the time, “we expect appropriate action to be taken, up to and including being exited from the company.”

The person familiar with these latest cuts said many of the eliminations were made by “looking at individual roles, individual skill sets and making sure we have the right number of folks working on the right things. It was very strategic … looking at speed and making sure people are working on the right things.”

GM CFO Paul Jacobson has said that while GM has taken $2 billion out of its costs over the past two years, it continues to “strive for efficiency” to not only get its electric vehicles to variable profitiability by year-end, but also in running the core business. Variable profitiability means the revenue GM earns from selling the vehicle exceeds the direct cost of producing it. The calculation excludes corporate or “fixed” costs. Currently, EVs are not making money for the company, GM made the bulk of its $4.1 billion in pre-tax profits last quarter from the sales of gasoline-powered pickups and SUVS.

While there are no further sweeping job eliminations expected this year, the person familiar with the situation said, “Team leaders have the discretion to make adjustments to their team based on their needs and what they’re working on, but nothing there’s specific.”

GM is expected to file a Worker Adjusted and Retraining Notification (WARN) with the state later of the specific number of jobs that have been eliminated.

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.