General Motors cuts 1,000 jobs worldwide to “optimize” its efficiency

General Motors cut a total of about 1,000 salaried and hourly employees early Friday morning as part of an ongoing restructuring.

The move comes after the company reduced its production of electric vehicles and adopted a new salaried employee ranking system to rank workers based on their productivity earlier this year. In August, GM also laid off nearly 1,500 employees, none of them in Tennessee, but mostly in its services and software divisions.

The layoffs were concentrated among the company’s white-collar workers.

Its Tennessee operations appear unaffected, but company officials declined to confirm whether Spring Hill workers were affected by the job cuts. GM’s Spring Hill manufacturing plant makes the Cadillac XT5, XT6 and all-electric LYRIQ models.

In September, workers at GM’s Ultium Cells battery plant in Spring Hill joined the United Auto Workers union. Ultium is a joint venture between GM and LG Energy Solution to produce batteries for electric vehicles. The UAW secured contract upgrades for GM, Ford and Stellantis workers in 2023.

The automaker will also stop using its Yuma, Arizona, desert proving grounds to test vehicles in hot weather. In the updated figures, this change will affect 33 jobs. Additionally, GM is permanently closing its durability, corrosion and disassembly departments at its Milford, Michigan, proving grounds. The latter resulted in the permanent layoffs of 44 hourly employees represented by the UAW and 16 salaried employees, the Detroit Free Press confirmed.

GM’s latest job cuts span its global facilities and several departments, said a person familiar with the matter who asked not to be identified because they are not authorized to share this information with the public. Most of the 1,000 jobs eliminated were salaried positions assigned to GM’s global technical center in Warren, Michigan. In a government filing released Friday, GM said 507 people assigned to the technical center had been laid off.

A small number of them were hourly employees, some of whom were represented by a union. The person said the UAW had been informed.

GM employed about 163,000 people worldwide as of Dec. 31, according to its 2024 annual report.

GM spokesman Kevin Kelly confirmed the cuts Friday and said:

“In order to win in this competitive market, we must optimize for speed and excellence. This means operating efficiently, ensuring we have the right team structure and focusing on our key priorities as a business. As part of this ongoing effort, “We have made a small number of team reductions. We are grateful to those who have helped establish a strong foundation that positions GM to become an industry leader in the future ”

A request for comment from the UAW was not immediately responded to.

An employee, who worked for several decades at GM, told the Detroit Free Press Friday that he received an early morning email that began: “We are faced with the difficult decision to say goodbye to some of our colleagues .” It referred to the company’s simplification, but did not give a reason for his specific termination or details of severance pay. He asked not to be named due to the sensitivity of the situation and the fact that he has not yet received a severance package, but said he benefited from top-notch performance reviews. order for years and would therefore be shocked to learn if he had been fired because of his performance. .

The person with knowledge of the GM job cuts said those who were laid off will receive severance pay based on their years of service and any other legal requirements in their area. This person said some of those layoffs “were a result of the new filing system, but the rest were due to the normal course of business, to make sure you have people in the right places and they’re doing the right thing . GM worked with the team leaders.

GM continues to ‘pursue efficiency’

In August, as first reported by the Free Press, GM announced changes to its salaried employee performance evaluation system and bonus plan. GM said it was moving from a three-point to five-point performance rating scale for the year-end performance review cycle, which typically begins in November.

Under the new plan, GM expects the leader of each organization 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. For the 5% who do not meet expectations, GM then wrote in an email: “we hope that appropriate measures will be taken, up to and including the exit of the company.”

The person with knowledge of these latest cuts said many of the eliminations were made by “looking at individual roles, individual skill sets and making sure we had the right number of people working on the right things.” It was very strategic… looking at the speed. and making sure people are working on the right things.”

As for the Yuma Proving Grounds, GM’s website says it employs 38 people. The person familiar with GM’s plans said a few would stay to maintain the facilities. GM is shutting it down immediately because the company believes it can do much of the same testing, either at its Milford proving ground or using virtual technology. GM has owned its Yuma Proving Grounds since 2009 and leases the 2,400 acres to the U.S. Army. GM also subleases parts of it to other companies for use. GM will continue to sublease it until the lease term expires, the person said, but did not know that date.

In Milford, GM is immediately closing its durability, corrosion and disassembly departments because most corrosion testing is done at the component level. So it’s more efficient to outsource this testing to suppliers, the person said.

GM Chief Financial Officer Paul Jacobson said that even though GM has cut costs by $2 billion over the past two years, the company continues to “pursue efficiency” to not only bring its electric vehicles to variable profitability by the end of the year, but also in terms of operation. the core business. Variable profitability means that the revenue GM earns from selling the vehicle exceeds the direct cost of producing it. The calculation excludes business or “fixed” costs. Currently, electric vehicles don’t make money for the company; GM made the bulk of its $4.1 billion in pretax profits last quarter from sales of gasoline-powered pickup trucks and SUVs.

Even if there are no other significant job cuts this year, the person familiar with the matter said: “Team leaders have the discretion to make adjustments to their team based on their needs and what they are working on, but nothing is specific. »

In the Worker Adjustment and Retraining Notification (WARN) that GM filed Friday with the state and obtained by the Detroit Free Press, GM said 507 jobs at its Warren Technical Center were eliminated. The job listing shows that most are in after-sales engineering, architectural engineering, contact center and business planning.

It reads: “As of November 15, 2024, the affected employees will no longer report to work, their normal professional responsibilities will cease and they will be separated. Affected employees will receive payment equivalent to their salary and benefits as if they were employed until January 14, 2025. These separations are expected to be permanent at the GM Global Tech Center.

—Sandy Mazza contributed to this report.

Contact Jamie L. LaReau: [email protected]. Follow her on Twitter @jlareauan. Learn more about General Motors and sign up for our automotive newsletter. Become a subscriber.