General Motors is offering voluntary buyouts to the majority of its US staff in a drive to save money.

The move comes after 500 job losses as the automaker strives to save $2 billion in structural costs over the next two years.

US corporate employees with a minimum five years tenure as of June 30 are eligible for the “Voluntary Separation Program,” or VSP.

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The company will also give buyouts to executives in non-US countries who have been with the firm for at least two years.

GM projects a pretax charge of close to $1.5 billion as a result of the buyouts.

Most of the charges will likely be all-cash and occur during the first half of the year.

CEO Mary Barra said the initiative is “designed to accelerate attrition in the US,” which it is hoped will potentially avoid “involuntary actions” in the future. 

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The buyout offer comes after the Detroit carmaker said last week it would lay off about 500 salaried employees around the world.

The last time GM granted such a huge buyout program was 2018-2019 for around 18,000 North American white-collar employees.

GM said: “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.”

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GM revealed the $2 billion cost-cutting plan in January, estimating that 30 to 50 percent of the savings will be realized by 2023.

At the time, executives stated they intended to reduce headcount through attrition instead of layoffs.

US employees who take the buyout will receive a month’s salary for every year of employment for up to 12 months, as well as COBRA health insurance.

They will also be granted prorated team performance bonuses and outplacement services. 

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Global staff will receive base salaries, incentives, COBRA, and outplacement services.

Eligible employees interested in the program must sign up by March 24. 

Those who choose a voluntary package and are approved will leave by June 30.

A company spokeswoman did not disclose the number of employees targeted for accepting the buyout packages. 

Source: CNBC

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