As per the terms of the aggressive restructuring plan submitted to Congress in December of last year, General Motors announced today that it will be cutting its salaried workforce by 10,000 members in 2009. Globally, the number of white collar employees on The General’s payroll will be reduced from 73,000 to 63,000, with 3,400 of the planned 10,000 to be pulled from GM’s U.S. offices (which currently total 29,500 employees). Effective May 1, 2009, all those employees lucky enough to escape unemployment, GM will be implementing temporary pay reductions for the majority of employees. Domestically, executive employees will have their salary cut a full 10%, while all other junior level salaried workers will be receive a paycut of 3-7%.
By 2012, GM’s restructuring plan ultimately calls for eliminating 31,000 hourly and salaried employees from its workforce of 96,000, a maneuver intended to cut GM’s pay roll expenditures by 30%.
GM to Reduce Salaried Employment Levels
DETROIT — GM is notifying its employees that it will reduce salaried employment globally from a current level of 73,000 to approximately 63,000. These reductions are expected to take place in 2009.
These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability. GM outlined the need for the reductions in its restructuring plan submitted to Congress on December 2, 2008. The announcement this week begins implementation of this aspect of the plan.
Salaried employment reductions will vary by global region, depending on the staffing levels in the region and market conditions. Details of the reductions and separation programs will be shared directly by regional leadership with the affected employees.
In the United States, approximately 3,400 of GM’s 29,500 salaried employees will be impacted. These reductions will be made using GM separation programs and policies, which provide for severance payments, benefit contributions and outplacement assistance. The majority of the reductions are expected to take place by May 1, 2009.
GM also announced a temporary pay reduction for a majority of U.S. salaried employees. This begins May 1, and will be effective through the end of the year, when it will be reviewed. In the U.S., executive employees will have their base pay reduced by 10 percent, and many other salaried employees will see reductions of 3 to 7 percent.
Other countries are currently reviewing compensation and benefits for salaried employees.
# # #
Source: General Motors
Image Cred: AP Photo by Carlos Osorio