Please enter valid email address to continue. Company information: Industry/Area of Activity: Autos & Auto Parts; Company , https://www.forbes.com/sites/stephaniedenning/2018/11/29/why-the-general-motors-layoffs-were-strategic/, Nov 29, 2018 Smallish-Scale Layoffs : By most benchmarks, cutting 14,000 employees is a large-scale layoff . General Motors' aggressive hiring plans for this year have cooled, but the automaker reaffirmed Wednesday that it has no plans to lay off any of its workforce. The company has been moving to expand its revenue sources with ventures outside of selling automobiles. Ford gearing up for more layoffs, plant closings. As per my analysis, the Company is not obliged to prioritize the ancillary units that are affected by the layoffs and plant shutdowns than their own Company. I like our position, and I wouldn't trade it with anyone in our industry. General Motors Co. has laid off 500 executive-level and salaried employees just a month after its CEO said the company was "not planning layoffs" amid major job cuts across the automotive industry. Become a subscriber. Ford also said it would pay a 15-cent dividend in the third quarter. "We think the underlying business is going to be pretty consistent with what we saw last year, and I think that's a slightly more bullish statement than where most of the market is," he said. The cuts affect about 500 positions, according to a person familiar with the plans, which were announced internally Tuesday. GM is planning to stop building vehicles with poor sales and which are not preferred by the customers. At the end of last year, GM employed about 86,000 hourly workers and 81,000 salaried employees worldwide. The decision by GM and other manufacturers to reduce expenses and streamline operations coincides with the industry's need for increased efficiency and the growth of competition. I believe it is completely ok for a company trying to adapt to the changing market conditions and planning to produce vehicles that are preferred by the customers considering the environmental factors. We are limiting our hiring to only the most strategically important roles and we will use attrition to help manage overall headcount, said Barra. As per the notice, they have invoked section 25 of the Industrial Dispute Act, wherein no permission is needed. The livelihood of the North-American workers seems to be affected drastically (Lau, 2018). Shares have advanced 15% so far in 2023. 2023 CBS Broadcasting Inc. All Rights Reserved. GM to lay off 4,250 salaried workers in North America starting Monday. GM feels they need to optimize themselves as per the change in market conditions and preferences of the customers in order to position themselves in the long-run. But for GM , a company that employs 180,000 people , https://www.cnbc.com/2019/02/01/gm-readies-to-make-4000-involuntary-layoffs-next-week.html, Feb 1, 2019 General Motors is planning to layoff at least 4,000 salaried workers in North America starting Monday ahead of the companys fourth-quarter , https://www.reuters.com/article/us-gm-layoffs/gm-cutting-4000-workers-in-latest-round-of-restructuring-idUSKCN1PT21Z, Feb 4, 2019 GM is also cutting its executive ranks by 25 percent and last week laid off three senior people in its Washington office and some other small , https://abcnews.go.com/Business/story?id=6053665&page=1, DETROIT Another 1,600 workers at three General Motors gm factories will be laid off indefinitely over the next few months as the company tries to control , https://www.theguardian.com/business/2018/dec/27/general-motors-ohio-auto-car-layoffs, Dec 27, 2018 GM stunned its workforce on 26 November, the Monday after Thanksgiving, by announcing it would cut roughly 14,000 jobs and idle five factories , https://www.cnn.com/2020/06/25/business/gm-layoffs-tennessee-covid/index.html, Jun 25, 2020 The company is eliminating the third shift of workers at a plant as of July 31 in Spring Hill, Tennessee, about 40 miles south of Nashville. The given video about GM Layoffs explains that one of the GMs Canadian plants at Oshawa, Ontario which produces Chevrolet Impala is the home for General Motors and it has been more than a decade the company is operating there (Feick, 2018). There has been a growing trend in the automotive industry towards cost-cutting measures and streamlining operations. A brief introduction of the General Motors. 1125 N. Charles St, Baltimore, MD 21201. The hiring spree contrasts with February of 2019, when GM cut about 8,000 white-collar workers worldwide as part of a restructuring that added $2.5 billion to the company's bottom line. All Rights Reserved. Electronic Arts, which is considered as one of the leading American Video Game Company around the world plans to cut 350 of its employees in the marketing, publishing, and other areas which includes closing offices in Japan and Russia (Schreier, 2019). Backtested performance is developed with the benefit of hindsight and has inherent limitations. Copyright 2023 IBTimes LLC. Donald Trump also threatened General Motors that he will be cutting all the subsidies that have been provided to them. The , https://www.washingtonpost.com/business/2018/11/26/gm-lay-off-percent-salaried-workers-halt-production-five-plants-us-canada/, Nov 26, 2018 Amid global restructuring, General Motors announced Monday it would reduce its North American production and salaried and executive . 2022 CBS Broadcasting Inc. All Rights Reserved. The Company took this strategic decision in order to cope with the changing environment, deliver all those commitments, and improve customer service by meeting the needs of the players. Copyright "That's why we're already taking proactive steps to manage costs and cash flows, including reducing some discretionary spending and limiting hiring to critical needs and positions that support growth. This includes the following plants. For those thousands of employees affected by layoffs, the company plans in providing many severance programs so that their lives to a better extent. General Motors is considered one of the worlds largest leading automobile company which was founded by William C. Duran in September 1908 and has been operating its business around the globe maintaining industry leadership (Essays, 2018). Ancillary units are formed as they found the opportunity in the state where the GM plant was operating. Since late 2020, it has added about 21,000 technical positions. The company believes that it is better to do restructuring when both the company and economy are strong. Share your stories and opinions with us here. This will also see it reducing its number of executives by 25% as a way to cut costs and streamline decision making. Cutting 500 jobs out of 81,000 is a very small percentage. General Motors Cost Reduction Efforts. GM announces sweeping layoffs; spares Flint. "The areas we're focusing on include continuing to reduce complexity in all of our products and reducing corporate overhead expenses across the board," Barra said, as quoted by Auto News. General Motors Co. has laid off 500 executive-level and salaried employees a month after its CEO said the company was "not planning" job cuts. When it reported 2022 Q4 earnings on Jan. 31, CEO Mary Barra stated, I do want to be clear that were not planning layoffs.. But GM is moving forward from a position of strength, Barra said. General Motors had about 86,000 hourly employees and nearly 81,000 salaried employees as of the end of 2022. Hundreds of job cuts indicate a very small percentage of the overall headcount. The news regarding the strategic decision of employee layoff has been welcomed by the investors which led to the increase in the stock price of GM by 4.8% which was the highest closing price GM has had in about these three months (CBSNews, 2018). In turn with the 21st century, the needs and preferences of the customers are changing rapidly because of the advancement of science and technology. Lorem ipsum dolor sit amet, consectetur adipiscing elit. It is considered that GM didnt build Oshawa rather Oshawa built General Motors. She also stressed the importance of having the "winning team" to beat the competition and achieve the company's goals. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. In my opinion, the decision taken by General Motors regarding restructuring and shift toward the future-forward technology of electric cars and automated self-driving cars is right. The results come as the U.S. automotive industry is beginning to normalize after several years of record-low inventories. The area around the plant is designed in such a way that the shutting down of the GM plant will affect the entire city. Further, the CEO called 2023 the company's "breakout year" since they expect to deliver $10.5 billion to $12.5 billion in profits for this year. For 2023, GM expects net income attributable to stockholders of between $8.7 billion and $10.1 billion. It is considered that GM didnt build Oshawa rather Oshawa built General Motors. The development of electric and driverless vehicles, which need a large amount of funding and R&D, also puts pressure on automakers. GM beats expectations on top and bottom line. quotes delayed at least 15 minutes, all others at least 20 minutes. GM forecast 2023 net automotive cash from operating activities to come in between $16 billion and $20 billion and sees automotive free cash flow of $5 billion to $7 billion. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. Watch: US: General Motors on cost-cutting drive, cuts hundreds of jobs | World Business News. Wall Streets Moderate Buy consensus rating for General Motors is based on seven Buys and four Holds. The job reductions are in the low hundreds, Reuters reported. The president promises that there will be auto jobs coming to the people around the places like Ohio where the massive layoffs by General Motors are taking But this doesnt mean that investors should be worried about GMs future. The cuts affect about 500 positions, according to a person familiar with the plans, which were announced internally Tuesday. Ford Motor earlier this month confirmed it would cut 3,800 jobs in Europe over the next three years to adopt a "leaner" structure as it focuses on electric vehicle production. Demand and pricing for GM's vehicles "remain strong," CFO Paul Jacobson told reporters Tuesday morning. A new round of GM layoffs will result in massive changes at the automobile manufacturer. Retrieved from https://www.cbsnews.com/news/gm-layoff-announcement-sparks-controversy/, Essays, U. Also read| General Motors recalls 140,000 Chevy Bolts from US, Canada markets. As growth slows in the world's largest economies, additional layoffs are anticipated this year. Article printed from InvestorPlace Media, https://investorplace.com/2023/03/general-motors-layoffs-2023-what-to-know-about-the-latest-gm-job-cuts/. Barnas said that the company is focusing on accountability and efficiency this year. Its adjusted profit margin was 9.2%, down 2.1 percentage points compared with the previous year. She clarified that the company aims to reduce complexity in all its products and corporate overhead expenses but does not intend to lay off employees to cut costs. The TipRanks Smart Score performance is based on backtested results. That includes taking out "significant cost" by 2020 as GM transformed the company. The video emphasizes that the blue color workers who built the cars for more than 100 years and supported the company as well as also helped in building America are affected by the layoffs in numerous ways. In a Tuesday letter viewed by CNBC, GM Chief People Officer Arden Hoffman confirmed the company's goal of $2 billion in cost savings over the next two years, which "we'll find by reducingcorporate expenses, overhead, and complexity inallour products.". She clarified that the company aims to All Rights Reserved. Those results marked the high-end of the company's previously revised guidance. GM stock isnt reacting poorly to this news. All rights reserved. 2023 CNBC LLC. All of this will help us continue to execute our growth strategy and insulate it from short-term market challenges.. Sign up below to get this incredible offer! The letter said the cuts, which follow performance evaluations, wouldimpact a "small number of global executives and classified employees following our most recent performance calibration." GM is to receive exclusive access to phase one of production, the automaker announced. All rights reserved. General Motors Layoffs 2023: What to Know About the Latest GM Job Cuts, 5 Hypergrowth Stocks With 10X Potential in 2023, The Countdown to Destruction Has Already Begun for Exela Technologies Stock, Louis Navellier and the InvestorPlace Research Staff, AMC Stock: The Convergence Trade With a Massive Wrinkle, Cathie Wood Is Betting Big on These 5 AI Stocks, Housing Market Crash Alert: Mark Your Calendars for Feb. 28, RIVN Stock Price Predictions: The Case for Rivian Reaching $26. Truby could not say whether more cuts are coming. It's also partnering with Honda on battery technology and vehicle platforms. Listed below are the closing and layoff notices reported to the Virginia Workforce Networks Rapid Response program. Per The Detroit News: The move, delivered amid impressive profitability, signals the evolving impact of electrification on legacy automakers like GM. At the end of 2022, General Motors employed about 86,000 hourly workers and 81,000 salaried employees worldwide. Data is a real-time snapshot *Data is delayed at least 15 minutes. Retrieved from MakeInnovationWork: https://medium.com/make-innovation-work/what-gms-layoffs-tell-us-about-disruption-in-the-automotive-sector-383b96ec1b04, Schreier, J. The earnings bring GM's three-year total to $1.2 billion. The opinions expressed in this article are those of the writer, subject to theInvestorPlace.comPublishing Guidelines. The cuts affect about 500 positions, according to a person familiar with the plans, which were announced internally Tuesday. General Motors Co. (NYSE: GM), one of the St. Louis region's largest employers, on Tuesday reported a strong fourth quarter and full-year 2022 earnings that outperformed expectations. This information is provided for illustrative purposes only. Job cuts: Many American firms have been downsizing to manage costs. GM expects some head count reduction due to attrition but the company is "not planning layoffs," Jacobson said. A Division of NBCUniversal. Wall Street has been bracing for a"demand destruction"scenario for the last several quarters, with some analysts suggesting automakers may need to execute cost-cutting measures to offset recessionary spending shifts. But more important to note is the fact that GM is in a period of transition. ", GM has "modeled several downturn scenarios," she said, and it's prepared to take "more deliberate action when and if necessary.". I believe it is completely ok for a company trying to adapt to the changing market conditions and planning to produce vehicles that are preferred by the customers considering the long term sustainability of the company. However, the company called these headcount reductions attrition and not layoffs. On General Motors (NYSE: GM) had previously been trying to hold out on job cuts. During the companys Q4 2022 earnings call in January, CEO Mary Barra stated, I do want to be clear that were not planning layoffs. Barra said the company is targeting $2 billion in cost savings in its automotive business over the next two years. We continue to shift resources to EVs with around 75% of our product specific capital dedicated to EVs and AVs [autonomous vehicles], said CFO Paul Jacobson during the Q4 earnings call. (2018, November). GM guided toward 2023 results above what Wall Street was expecting. In July, GM reported its second quarter income was about 39% lower than the year-ago periodas ongoing production disruptions persisted due to supply chain issues andan industry-wideglobal semiconductor chip shortage. How High Can the Supreme Court Take SOFI Stock? There has been a wave of layoffs across corporate America, with major tech companies and Wall Street titans at the forefront. Backtested performance is not an indicator of future actual results. Ford reported second-quarter adjusted earnings of $3.7billion more than triple that of the same period a year ago,when the company had a gain of $1.1billion. It was the stock's best daily performance since Oct. 4. CEO Mary Barra assured Wall Streetthat the company is taking cost-cutting measures, such as dialing back on new hires,and is prepared to do more if needed. GM's EVs currently range from the mid-$20,000 Chevrolet Bolt models to the more than $100,000 Hummer vehicles. (2018, November 27). General Mills, manufacturer, and marketer of branded consumer foods is to lay off 700 to 800 US and Canada jobs, and 500 to 600 international jobs. Customers are the king of any business and if the business does not try to adapt to the changing demand of customers it will no longer sustain in the long run and can make a profitable business. She said GM has been "proactively managing our cost structure all along." Save my name, email, and website in this browser for the next time I comment. On Monday, crosstown rival Ford Motor Co. said it was cutting 3,000 jobs across Canada, the U.S. and India. The recent move contradicts GM CEO Mary Barra's statement during an earnings call in January that the company was not planning layoffs amid cost-cutting strategies. Data is a real-time snapshot *Data is delayed at least 15 minutes. Certain assumptions have been made for modeling purposes and are unlikely to be realized. General Motors expects its 2023 capital expenditure in the range of $11 billion to $13 billion. Can I Be Laid Off While On Workers Compensation? January 26, 2022 / 3:35 PM / CW50 Detroit DETROIT (AP) There are more than 8,000 new technical job openings at General Motors, and the automaker The impacted employees will be provided with 50% of their basic pay and allowance, as per their last drawn salary. According to the Bureau of Labor Statistics, the number of people employed by motor vehicle and parts manufacturers declined by 3,500 in January. WebGeneral Motors said it is cutting salaried and executive staff after saying a month ago that it wasn't planning layoffs. This material may not be published, broadcast, rewritten, or redistributed. Photograph:(Reuters), General Motors recalls 140,000 Chevy Bolts from US, Canada markets. He said GM is being "appropriately cautious" but vehicle inventories remain constrained amid strong demand. In fact, its in the green today, but that doesnt mean investors shouldnt be thinking about the General Motors layoffs and what they may mean for the companys future. Most of the layoffs happened at GM's technical center, and most of those people worked on components for internal-combustion engines and discontinued car models. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Can You Get Laid Off While On Maternity Leave, Can Laid Off Union Workers Collect Unemployment, How Long Does Insurance Last After Being Laid Off. Companies like Amazon, Walt Disney, Facebook owner Meta, and American banks have had to cut back on staff due to rising interest rates and sluggish consumer demand. To see this page as it is meant to appear, please enable your Javascript! The hiring is connected to GM's transitionto an electric vehicle software company by 2035. WebHome. Now, the General Motors layoffs are looming and may lead to further uncertainty from investors, making it harder for the stock to rally in the short term. Got a confidential news tip? We want to hear from you. All rights reserved. It expects adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7. Others such as Rivian Automotive also made salaried cuts, while Stellantis said it would idle a plant in Illinois. General Motors' announcement of cutting executive-level and broader jobs is part of the automaker's efforts to reduce its structural costs and enhance efficiency. TipRanks is a comprehensive research tool that helps investors make better, data-driven investment decisions. GM and other manufacturers' cost-cutting initiatives aim to improve their competitiveness and financial performance in light of difficult market conditions. They will be across various functions of the company, said the person, who asked not to be named because the plans are not public. Nasdaq Tired of arriving late to the Big Returns Party?. 2023 InvestorPlace Media, LLC. GM said it incurred special charges in the fourth quarter of $511 million related to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia. General Motors believes in bringing innovation with the adaptation of new technologies that is preferred by the users as it meets their need and demand of having a vehicle that is comfortable, spacious, and luxurious. General Motors has temporarily laid off 5,000 workers at its Flint Assembly plant in Michigan due to a planned production stoppage. All of these plants will be closing down in 2019. Not only the workers but also the ancillary units around the plant are affected by the strategic decision of layoffs by the company. By the end of April, GM had transferred about 1,305 of the nearly 2,800 affected to jobs at its other U.S. plants, said company spokesman Dan Flores. What GMs Layoffs Tell Us About Disruption in the Automotive Sector. The hires don't hurt the bottom line, and they help to achieve the GM's targets, said Jessika Lora, GM''s director of global innovation. Just over one month later, however, the auto giant has announced that it will be cutting roughly 500 salaried jobs, chiefly at the executive level. Mary Barra, in a letter to shareholders, described. According to General Motors (NYSE:GM) it is planning to lay off 15% of itssalaried and salaried contract staff. All Rights Reserved. General Motors is conducting damage control around its return-to-office plans after a Friday afternoon message to employees spurred backlash and confusion.