The news: GM wants to part ways with tens of thousands of workers without having to lay them off as part of its shift to EVs.
- CEO Mary Barra sent a letter to a majority of GM’s US-based salaried employees offering to buy out their jobs as part of a voluntary severance program, per The Verge.
- Roughly 60% of GM’s 58,000 US salaried employees are based in Michigan, per MLive.
A heavy EV lift: Despite earning $14.5 billion income in 2022—it’s highest earnings year ever—GM expects it’ll have to bleed $35 billion to make its EV venture profitable by 2025 amid tight competition, per The Verge.
The employment outlook: GM wants to avoid a PR backlash that would accompany laying off most of its salaried employees.
- Nudging employees out the door stands in contrast with an overall US job market that’s showing resilience despite interest rate hikes. Employers added 311,000 jobs in February, per The Wall Street Journal.
- Higher interest rates and persistent inflation could put a damper on EV sales this year, which might mean more budget cuts ahead.
- While some of the US job growth is in the auto industry, white-collar workers who lack high-tech skills might have a tougher time finding new roles compared to their blue-collar counterparts.
- Longer term, we can expect to see the auto industry embrace more automation, which could curtail job prospects for both blue- and white-collar workers.