Originally Published: 09 MAR 23 09:58 ET
Updated: 09 MAR 23 10:19 ET
By Jordan Valinsky, CNN Business
(CNN) -- General Motors said in January it would save $2 billion without planning any layoffs. But on Thursday it said it was looking for workers to leave voluntarily.
In a regulatory filing, the automaker said it was looking to save costs through attrition and a voluntary separation program in which eligible employees would get a lump sum payment and other severance based on how long they worked at the company. The buyouts would cost the company $1.5 billion before taxes this year.
The voluntary separation program will be offered to all US salaried employees with at least five years of service and global executives that have been with the company for at least two years, a GM spokesperson told CNN. In a statement, the company said that employees are "strongly encouraged to consider" the program.
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," a GM spokesperson said in a statement.
The news follows the elimination of hundreds of salaried worker jobs earlier this month. A person familiar with the plans told CNN that those job cuts would affect a few hundred white-collar employees globally.
GM has 167,000 employees globally, with 124,000 in North America. That includes more than 42,000 members of the United Auto Workers union.
The company recently reported a record annual profit for 2022 and also announced plans to reduce costs by $2 billion over the next two years, including cutting corporate overhead across the board. But at that time CEO Mary Barra told investors, "I do want to be clear, though, we're not planning layoffs. We are limiting our hiring to only the most strategically important roles and will use attrition to help manage overall head count."
GM is spending a significant amount of money to shift production from traditional gasoline-powered vehicles to a lineup of pure electric vehicles. While that will eventually reduce labor costs since EVs don't take as many hours of labor to produce, it does require billions of dollars in upfront investment. GM has said it will invest $35 billion between now and 2025 in the shift to EVs. Its target is to have an all EV lineup of passenger vehicles by 2035.
In a related move, Ford announced plans in February to eliminate 3,800 jobs across Europe, citing difficult economic conditions and its major push toward electric vehicles. The plan is part of the company's efforts to create "a leaner, more competitive cost structure for Ford in Europe," it said in a statement, adding that it intended to achieve the job cuts through voluntary redundancies.
--CNN's Chris Isidore and Peter Valdes-Dapena contributed to this report