General Motors Cuts 500 Jobs Based On Performance, Loses 1.45% Valuation In Stock Market

General Motors (GM) has made the shareholders aware of its latest and upcoming actions pertaining to the employees.

The car manufacturing giant has announced that it has plans of cutting 500 executive positions. The sources confirm that the company has already started working on that.

The company has adopted the same strategy as its competitors and fellow car manufacturing giants. The companies have been coming up with ideas for improving their company’s performance in all aspects.

However, it is crucial for every company to ensure that they are able to manage their finances and deal with the growing macroeconomic issues.

Therefore, the companies have been cutting down on their headcounts to ensure that they are able to deal with the rising costs. Their plan is to ensure that they are able to cut operational costs.

GM is Doing Things in a Different Manner

The decision-makers at General Motors have taken a different approach pertaining to the matter.

It is true that the company is laying off employees but it is not the workers that they are laying off. They have decided to lay off the executive employees.

These employees are responsible for dealing with the company’s matters on a higher level. Therefore, their salaries are high and they even take up a lot of benefits based on their roles and job descriptions.

The vehicle manufacturer seems determined in making sure that they only have the employees and headcounts who are capable enough to do the job.

They do not want to keep the executive employees who are not living up to their job requirements and expectations.

General Motors has announced that it will be downsizing on the basis of performance. If an employee is not able to perform as per the company’s standards, they will be downsized.

GM to cut off 500 Employees

So far, the company has readied a list of 500 employees who will be terminated in the due course. The information has been brought to light by one of the inside sources at the company.

The anonymous source has confirmed that the announcement about the layoffs was made internally on Tuesday. As communicated by the company, the layoffs will be carried throughout the departments they have.

This is quite surprising for the shareholders as they had not expected the company to call for any layoffs. The shareholders were literally taken off-guard by the latest revelation because the company’s top officials had told them otherwise.

It was in January when Mary Barra, the GM CEO, and Paul Jacobson, the company’s CFO announced they had no plans for layoffs.

They had communicated to the investors that they had no plans of calling for any layoffs in near future. From the sounds of it, the company was trying to hide its decision but it has been leaked out.

The company is working towards Cost Saving

It was on Tuesday when one of the reporting channels revealed a letter that was sent over by Arden Hoffman of GM to fellow executives.

The letter was also for the investors that read that the company has set a goal for cost savings. It was mentioned in the letter that they have a target of bringing their cost savings to figure up to $2 billion.

It was also added that the time to achieve the goal is two years. It also said that they had to get rid of complexities in all the products they are producing.

On top of that, they have to carry out a reduction in the expenses they are facing in the corporate sector.

The inside source has revealed that the company is going to carry out the layoffs after reviewing and calibrating the performance of its employees.

If the employees do not meet the standards, they will be taken off. The company started its layoff process on Tuesday.

Following the announcement, GM’s share prices took a dive and went down by 1.45%.