Salaried-worker layoffs will cut deep at GM

Nora Naughton
The Detroit News
“The best time to solve a problem is the minute you know about it," CEO Mary Barra said at The New York Times DealBook conference earlier this month, where business leaders discussed their industries. "Most problems don’t get smaller with time — and so that’s kind of a fundamental learning.”

General Motors Co. will likely have to lay off nearly 6,000 salaried workers after roughly 2,250 employees requested to take the buyout the Detroit automaker offered to North American salaried employees and global executives last month.

The number of employees who asked to take the buyout was outlined in a portion of a memo to employees from CEO Mary Barra, obtained by The Detroit News. GM said Monday it was targeting 8,000 jobs with the buyouts, a benchmark the company will now have to meet with about 5,750 layoffs.

Managers from each department were given cost-cutting goals to meet by the end of the year, which could be met by addressing discretionary spending or leveraging buyouts. The managers still have to approve the buyout requests from their employees before GM knows exactly how many employees it needs to lay off.

The automaker offered buyouts to 18,000 salaried workers on Halloween, and the deadline to accept the offer was last week.

Under GM's buyout offer, eligible employees could receive six months' pay and six months' health care coverage starting in February, though on a case-by-case basis some employees could leave before the end of the year to effectively get eight months' compensation.

The expected layoffs come as GM is also planning to stop production at five plants next year, including Detroit-Hamtramck Assembly and Warren Transmission, affecting about 14,300 jobs across the company.

The buyouts and layoffs among GM's salaried workers are part of what the automaker has called a transformation of its workforce. At the same time GM executes some 6,000 layoffs among salaried workers, it is hiring aggressively in emerging automotive disciplines like software development, batter and fuel cell technology and autonomous vehicle development.

GM Cruise LLC, the automaker's self-driving vehicle development arm based in San Francisco, recently surpassing 1,000 workers. A new office in Seattle opening early next year will also add up to 200 new workers.

"We are going to continue to hire," Barra told reporters Monday. She says GM is focusing harder on the "skillsets of the future"

"You will see us having new employees join the company as others are leaving," she said. "We still need many technical resources across the company."

Staff Writer Ian Thibodeau contributed to this report

Twitter: @NoraNaughton