(Bloomberg) -- General Motors Co (NYSE:GM). is buying out 5,000 salaried staffers globally as part of a cost cutting move that will save $1 billion on an annual basis starting this year, according to Chief Financial Officer Paul Jacobson.
The voluntary buyouts cover 6% of GM’s 81,000 white-collar employees and should allow the Detroit automaker to avoid involuntary dismissals, Jacobson said Tuesday. The cuts should also deliver roughly half of the company’s broader goal of saving $2 billion a year and will result in a $1 billion charge in 2023.
“We were willing to pay for a voluntary program to do everything we can to avoid involuntary layoffs,” Jacobson said at Bank of America (NYSE:BAC) conference in New York. “We’re in a position where we’ll be able to do that.”
The automaker announced the buyout plan last month as it sought to avoid layoffs. Involuntary job cuts are “not a consideration at this point” as a result of the voluntary reductions, GM said Tuesday in a separate statement.
GM is trying to conserve cash as it spends $35 billion over the next several years to convert its lineup of internal-combustion vehicles to all-electric powertrains. The company plans to offer 30 electric models globally by 2025.
Jacobson said the company is also staying lean as a precaution against the risk of a potential economic downturn.
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