A General Motors executive announced Tuesday that roughly 5,000 salaried GM employees accepted buyouts that will probably cost the company about $1 billion in the first quarter of this year.
GM offered the buyouts through a program announced last month to cut costs and avoid broader layoffs, as GM looks to reduce operating costs by $2 billion before the end of 2024.
Chief Financial Officer Paul Jacobson said at a Bank of America conference that GM aims to achieve about 30% to 50% of the overall cost-cutting goal this year and that the 5,000 white-collar workers accepting buyout offers will put the company at the higher end of that goal.
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When GM’s leaders first announced the cost-cutting goal, they initially said they planned to reduce headcount through attrition instead of layoffs. CEO Mary Barra warned last month that layoffs could be necessary if not enough employees accepted buyouts.
"We feel like we’ve gotten off to a really good start on it," Jacobson said. "This was a tool to get us to really accelerate the attrition curve; got a pretty quick payback."
A majority of GM’s 58,000 U.S.-based white-collar employees were eligible to participate in the buyout program.
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All U.S. salaried employees with at least five years of service as of June 30 this year and all executives with at least two years of service were eligible for the buyouts, which included an offer of lump sum payments and other compensation.
The majority of the employees who accepted buyouts are expected to depart GM by the end of June.
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GM projected that the buyout program would cost a total of $1.5 billion in a filing earlier this year. Jacobson indicated that GM is still "working through" the full extent of the charges and that some of those costs may spill over into the second quarter of this year.
GM shares were down about 1.9% in afternoon trading.
Reuters contributed to this report.
