GM is cutting hundreds of jobs to cut costs

Feb 28 (Reuters) – General Motors Co (GM.N) is cutting hundreds of board-level and salaried jobs to cut costs and streamline operations, a person briefed on the matter told Reuters on Tuesday.

Global reductions are in the “low hundreds,” the person said.

Arden Hoffman, GM’s chief people officer, said in a letter to employees Tuesday that the Detroit automaker is “committed to $2 billion in cost savings over the next two years, which we will find by reducing operating costs, overhead and complexity in reduce all of our products.”

GM announced its $2 billion cost-cutting target in January. The automaker said in January it was not planning any layoffs and did not label the cuts as layoffs on Tuesday.

GM said the track action on Tuesday “follows our most recent performance calibration and supports attrition curve management as part of our overall efforts to reduce structural costs.”

Hoffman said, “in an environment where our competitors’ margins are improving, it is imperative that we act now and focus on our own efficiency.”

Hoffman added that “to deliver on our commitments and beat the competition, we need the winning team, without exception. We need a culture shift that allows us to hold ourselves accountable for reaching the higher levels of operations which are now required.”

GM shares closed 1.5% lower.

Hoffman said, “Employees and leaders around the world will be equipped with options to address issues with greater urgency so that we can achieve our boldest goals… This is a fundamental cultural shift to be more achievement-oriented and accountable.”

Earlier this month, Ford Motor (FN) said it was cutting one in nine jobs in Europe and cutting 3,800 positions in product development and administration as part of a drive to cut costs in the region and concentrate technical know-how in the United States.

Stellantis (STLAM.MI) and unions signed an agreement Monday to cut up to 2,000 workers from the automaker’s Italian operations this year through voluntary layoffs. On Tuesday, Stellantis indefinitely shut down an Illinois factory that employs about 1,350 workers.

Reporting by David Shepardson in Washington and Kannaki Deka; Edited by Chris Reese, Lisa Shumaker and Kim Coghill

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