GM's 'Voluntary Separation Program' For Employees — What's On Offer For Those Opting To Leave?

General Motors Co. GM announced a voluntary separation option for employees to accelerate cost reduction.

What Happened: General Motors said that "eligible employees who choose to leave the company" will be offered "a combination of lump sum payments and other compensation based on their years of service."

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The company anticipates incurring pre-tax employee separation charges of up to $1.5 billion and and “up to $300 million in pre-tax, non-cash pension curtailment charges.”

While most of these expenses will be incurred during the first half of 2023, General Motors expects to continue incurring additional costs throughout the rest of the year, the company said in a regulatory filing on Thursday.

General Motors announced its cost reduction plan towards the end of January. The program aims to cut costs, amounting to $2 billion, in the next two years by reducing product complexity and corporate overhead expenses. The company said it expects 30% to 50% of these savings in 2023.

“I do want to be clear that we’re not planning layoffs,” said CEO Mary Barra at the company’s fourth-quarter earnings call.

However, in late February, General Motors slashed about 500 salaried positions across various functions to cut costs. At the end of 2022, the company employed about 86,000 hourly workers and 81,000 salaried employees worldwide.

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