General Motors is cutting hundreds of white collar jobs

New York (CNN) General Motors is cutting an unspecified number of white collar jobs globally, as part of its stated effort to cut costs to remain competitive in the shift to electric vehicles.

“We’re looking at all ways to address efficiency and performance,” Arden Hoffman, the company’s chief operating officer, said in a letter to employees Tuesday. “This week we are taking action with a relatively small number of world-class executives and employees following our most recent performance calibration. They will be leaving the Company starting today.”

A person familiar with the plans said the job cuts would affect a few hundred employees. General Motors has 58,000 salaried employees in the United States It employs 46,000 unionized American hourly workers, making up the majority of its 167,000 employees worldwide.

General Motors just mentioned a annual profit record for 2022. At that time, it announced plans to cut costs by $2 billion over the next two years, including cutting overall company overheads. But at the time, executive director Mary Barra told investors, “I want to be clear, though, that we’re not planning layoffs. We’re limiting our hiring to only the most strategically important roles and we’ll use attrition to help manage the total number of chiefs.”

Hoffman’s statement to employees said these job cuts are part of an “fundamental cultural shift to be more performance- and accountability-driven.”

General Motors is spending a significant amount of money to shift production from traditional gasoline-powered cars to a range of pure electric vehicles. While this will ultimately reduce labor costs since EVs don’t take many man-hours to produce, they do require billions of dollars in upfront investment. General Motors said it would invest $35 billion between now and 2025 in switching to electric vehicles. Its goal is to have the entire range of passenger cars by 2035.

Stellantis, which makes Chrysler, Dodge, Jeep and Ram vehicles, has taken an indefinite hiatus from its Belvidere assembly plant from Tuesday, where it built the Jeep Cherokee compact SUV. Closing plans were announced just before Christmas. The latest was 1,200 workers in a single shift at the factory.

Production of the Cherokee, whose sales fell 55% last year, has been moved to Mexico, according to the United Auto Workers union, though a Stellantis spokesperson said no plans have been announced yet as to where future production will take place.

Stellantis CEO Carlos Tavares said the factory closure is partly due to the need to cut costs as he sees much greater costs for producing electric vehicles in the near term.

“Why are we doing this? Because we need to find a solution to the fact that the technology identified is 40% more expensive than traditional technology. This is the situation,” he said at a recent media roundtable. “You have 40% more total production costs when we make an electric car than you do with a conventional car. So what do we do with that 40%? It’s a lot of money. You can’t pass it on to the consumer.”

Ford, also facing the cost of converting to a range of electric vehicles, has been making much deeper job cuts in recent months, including layoffs. 3000 dollars with pay Announced in August. So are the pieces 3,800 jobs across Europewas announced earlier this year.

both of them stronghold (F) And GM (GM) Face contract negotiations with the UAW this fall over new work deals for their hourly workers in the United States. the Union General Motors has been on strike for six weeks in 2019 before reaching an agreement on her current contract.