GM is cutting 1,000 jobs globally, some every hour, to improve efficiency

On November 15, 2024By Littum

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

The latest GM job cuts span its global facilities across multiple divisions, said a person familiar with the situation who asked not to be identified because they are not authorized to share that information with the public. Most of the 1,000 jobs eliminated were wage earners associated with GM’s Global Technical Center in Warren. But a smaller number were hourly workers, some of whom were union representatives. The person said the UAW was notified.

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

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

“To win in this competitive market, we need to optimize for speed and excellence. This includes working with efficiency, ensuring we have the right team structure and focusing on our top priorities as a company. As part of this continuous effort, we have made a small number of team reductions We are grateful to those who helped establish a strong foundation that positions GM to be a leader in the industry.

A request for comment from the UAW was not immediately returned.

This is the second round of job cuts at the automaker in just a few 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 from its engineering center.

An employee who worked for several decades at GM told the Detroit Free Press on Friday that he received an email in the early morning hours that began: “We are facing the difficult decision to say goodbye to some of our colleagues. ” It referred to simplifying the business, but did not give him a reason for his specific resignation or details of severance pay. He asked not to be named because of the sensitivity of the situation and has yet to receive a severance package, but said he had years of top-rated performance reviews so he would be shocked to hear if he was let go because of his performance.

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

In August, as the Free Press first reported, GM announced changes to its white-collar workers’ 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 annual performance review, which typically starts in November.

As part of the new plan, GM expects each organization’s leaders to rate 5% of their team as significantly exceeding expectations, 10% as exceeding expectations, 70% meeting expectations, 10% partially meeting expectations and 5% not meeting expectations to expectations. For the 5% that do not meet expectations, GM wrote in an email at the time, “we expect appropriate action to be taken, up to and including being removed 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 people working on the right things. It was very strategic … looking at the velocity 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 efficiencies” to not only bring its electric vehicles to variable profitability by the end of the year, but also in operating the core business. Variable profitability means that the revenue GM earns from selling the vehicle exceeds the direct costs of producing it. The calculation excludes business or “fixed” costs. Currently, electric cars do not make money for the company, GM made the bulk of its $4.1 billion in pretax profit last quarter from the sale of gasoline-powered pickups and SUVs.

While no further large-scale job eliminations are 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 specific.”

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

Contact Jamie L. LaReau: [email protected]. Follow her on Twitter @jlareauan. Read more about General Motors and register with us auto’s newsletter. Become a subscriber.