GM job salaried cuts continue, could run through February, in new performance evaluations

Posted by author January 27, 2025 Jobs

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General Motors continues to thin its ranks under a new evaluation program that looks to let go of poor-performing salaried workers, according to two sources familiar with the company’s plans.

According to more than 150 comments on social media by salaried workers, dozens were were let go on Friday, with some people blindsided by the move, others suspecting it was coming based on earlier performance reviews from mangers.

The automaker has started its annual employee reviews, which will continue through February, two people at the automaker told the Detroit Free Press. The people asked to not be named because they are not authorized to share this information publicly.

One of them said it is likely more people will be fired through the end of February as managers continue to evaluate worker performance as part of a new system GM unveiled last year, but no figure for how many will ultimately leave the company is known yet. The person said those let go for performance-related reasons will not be permitted to reapply for future openings at the automaker.

GM spokesman Kevin Kelly told the Free Press in an emailed statement only that, “GM is proud to have a culture where we foster and reward high performance, collaboration and excellence, which will help us attract and retain top talent in a competitive industry environment. That includes everything from ensuring employees know what is expected of them, providing feedback so they can develop and rewarding them for their performance.”

In August, as the Free Press first reported, GM announced changes to its salaried employee 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 exceeding expectations, 10% as exceeding expectations, 70% achieving expectations, 10% partially meeting expectations and 5% who do not meet expectations. For the latter 5%, GM wrote in an email at the time, “we expect appropriate action to be taken, up to and including being exited from the company.”

In November, GM cut a total of about 1,000 salaried and hourly employees early one Friday morning as part of the new ranking system as well as a “normal course of business” to achieve better operating efficiency, the Free Press reported.

At that time, Kelly told the 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.”

In a string of more than 163 comments by Friday on a General Motors page on Reddit under the subject of “layoffs,” many commented that they were let go earlier in the day and were blindsided when their supervisor told them they were being fired. Others indicated they suspected they would be cut either because they got a poor midyear review or their manager was giving them increasingly less work to do.

GM’s emphasis on more stringent performance evaluation and imposing consequences for poor performance reflects what many companies have been doing in recent years to improve productivity and cut costs, said Marick Masters, a labor expert and business professor at Wayne State University in Detroit, who has been closely watching corporate America’s personnel practices.

Masters said the risk of such a program could have mixed effects, but “the devil is in the details.” It depends on how fair the workforce deems GM’s procedures to be and how fair management is perceived to be in implementing the procedures along with what kinds of opportunities employees are given to improve peformance before being cut.

“I think it will have a mixed effect on morale. If it’s perceived as being fair in design and implementation, then I think people will welcome it because they’ve put up with too many poor performers for too long and that will attract talent,” Masters said. “The flip of that is very important as well. If it’s perceived as being poorly deisgned and managers show favorites in how they rank people … then it can lead to a lot of bad feelings across the board.”

Masters said GM’s practices are in line with the direction of corporate America post-COVID. Businesses are taking a harder view on operations, he said, and driving a workforce back to performing at higher levels with tougher evaluations and increased return-to-office policies.

Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.