According to a letter sent to employees Thursday by CEO Mary Barra, General Motors will offer voluntary buyouts to a “majority” of its 58,000 U.S. white-collar employees in order to cut $2 billion in structural costs over the next two years.
The “Voluntary Separation Program,” or VSP, will be available to all salaried employees in the United States who have worked for the company for five years or more as of June 30. Outside of the United States, the automaker will offer buyouts to executives who have been with the company for at least two years.
The last time GM offered such a large buyout program was in 2018-2019 for approximately 18,000 North American salaried employees.
GM announced the $2 billion cost-cutting program in January, estimating that 30% to 50% of the savings would be realized by 2023. At the time, executives stated that they intended to reduce headcount through attrition rather than layoffs.
Employees in the United States who are approved for the buyout will receive one month’s pay for each year worked up to a total of 12 months, as well as COBRA health coverage. They will also receive team performance bonuses and outplacement services on a prorated basis. Global employees will be paid a base salary, bonuses, COBRA coverage, and outplacement services.
Employees who are eligible for the program must sign up by March 24. Those who choose a voluntary package and are approved will be able to leave by June 30.