Tue, July 26, 2022 DETROIT, July 26, 2022 /PRNewswire/ -- General Motors Co. (NYSE: GM) today reported second-quarter net income attributable to stockholders of $1.7 billion and EBIT-adjusted of $2.3 billion, in line with the earnings update the company issued on July 1. The recent move contradicts GM CEO Mary Barra's statement during an earnings call in January that the company was not planning layoffs amid cost-cutting strategies. General Motors is considered one of the worlds largest leading automobile company which was founded by William C. Duran in September 1908 and has been operating its business around the globe maintaining industry leadership (Essays, 2018). As of December 2022, GM had about 86,000 hourly employees and 81,000 salaried employees worldwide. The Detroit automaker is looking for software, computer, mechanical and electrical engineers, as well as battery engineers, cyber security experts, and others. (2019, March 26). Just over one month later, however, the auto giant has announced that it will be cutting roughly 500 salaried jobs, chiefly at the executive level. Further, the CEO called 2023 the company's "breakout year" since they expect to deliver $10.5 billion to $12.5 billion in profits for this year. The strong report suggests GM is hanging onto record, or near-record, results even as the U.S. automotive industry begins to normalize after several years of record-low inventories and resilient consumer demand. The timing of the cuts, which were first reported by The Detroit News, is odd. The news regarding the strategic decision of employee layoff has been welcomed by the investors which led to the increase in the stock price of GM by 4.8% which was the highest closing price GM has had in about these three months (CBSNews, 2018). However, these arent all the locations that this will be closing up shop. General Motors' fourth-quarter results easily topped a year earlier. All Rights Reserved. The Company took this strategic decision in order to cope with the changing environment, deliver all those commitments, and improve customer service by meeting the needs of the players. A Division of NBCUniversal. Most of the layoffs happened at GM's technical center, and most of those people worked on components for internal-combustion engines and discontinued car models. General Motors Co. (NYSE: GM) on Tuesday reported a strong fourth quarter and full-year 2022 In July, GM reported its second quarter income was about 39% lower than the year-ago periodas ongoing production disruptions persisted due to supply chain issues andan industry-wideglobal semiconductor chip shortage. Data is a real-time snapshot *Data is delayed at least 15 minutes. The hiring spree contrasts with February of 2019, when GM cut about 8,000 white-collar workers worldwide as part of a restructuring that added $2.5 billion to the company's bottom line. OBrient loves helping everyone understand the complexities of economics. GM beats expectations on top and bottom line. That vehicle is expected to be followed by an electric Chevrolet Silverado work truck by midyear and electric versions of the Chevrolet Blazer and Equinox during the second half of 2023. US government wants chip makers to share profits in return for subsidies, Vaccine maker Novavax says substantial doubt on ability to stay in business, China's February manufacturing activity sees fastest growth in over a decade. GM said it incurred special charges in the fourth quarter of $511 million related to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia. The company's broader attempts to streamline operations include the anticipated "low hundreds" of job cutbacks. The post GM Layoffs: General Motors to Cut 14,000+ Jobs appeared first on InvestorPlace. General Mills, manufacturer, and marketer of branded consumer foods is to lay off 700 to 800 US and Canada jobs, and 500 to 600 international jobs. You can follow this link to learn about what cars GM is killing off. Those results marked the high-end of the company's previously revised guidance. Ford Motor earlier this month confirmed it would cut 3,800 jobs in Europe over the next three years to adopt a "leaner" structure as it focuses on electric vehicle production. There has been a growing trend in the automotive industry towards cost-cutting measures and streamlining operations. Sign up for free newsletters and get more CNBC delivered to your inbox, Get this delivered to your inbox, and more info about our products and services., 2023 CNBC LLC. I like our position, and I wouldn't trade it with anyone in our industry. Cutting 500 jobs out of 81,000 is a very small percentage. The company has been also planning to shut down its five big plants four in America and one in Canada which are as follows: The given video about GM Layoffs explains that one of the GMs Canadian plants at Oshawa, Ontario which produces Chevrolet Impala is the home for General Motors and it has been more than a decade the company is operating there (Feick, 2018). Barnas said that the company is focusing on accountability and efficiency this year. She clarified that the company aims to reduce complexity in all its products and corporate overhead expenses but does not intend to lay off employees to cut costs. Last year GM hired over 10,000 people worldwide, with one-third of them in software engineering jobs. We are limiting our hiring to only the most strategically important roles, and we'll use attrition to help manage overall headcount.". Aug 12, 2005. Sign up and stay up to date with our daily newsletter. "There are growing concerns about the economy to be sure," Barra said last quarter. In a letter to shareholders on Jan. 31, Barra said that the company earned a record $14.5 billion for 2022 while its hourly employees earned a record profit-sharing totaling $500 million. Todays action follows our most recent The company believes that it is better to do restructuring when both the company and economy are strong. Please note all regulatory considerations regarding the presentation of fees must be taken into account. It's also partnering with Honda on battery technology and vehicle platforms. "I do want to be clear, though: We're not planning layoffs. Samuel OBrient has been covering financial markets and analyzing economic policy for three-plus years. Nasdaq All Rights Reserved. General Motors Cost Reduction Efforts. The president promises that there will be auto jobs coming to the people around the places like Ohio where the massive layoffs by General Motors are taking place. A new round of GM layoffs will result in massive changes at the automobile manufacturer. Both General Motors and Ford are investing billions in expanding their presence in the lucrative EV space. The impacted employees will be provided with 50% of their basic pay and allowance, as per their last drawn salary. https://www.cnbc.com/2019/02/01/gm-readies-to-make-4000-involuntary-layoffs-next The decision by GM comes in response to similar actions taken by other significant automakers, such as Ford Motor and Stellantis, to cut expenses and streamline their operations. During the companys Q4 2022 earnings call in January, CEO Mary Barra stated, I do want to be clear that were not planning layoffs. Barra said the company is targeting $2 billion in cost savings in its automotive business over the next two years. On 2023 CBS Broadcasting Inc. All Rights Reserved. The given video in the CLA1 assignment talks about the strategic decision taken by the General Motors Company regarding cutting off its North American employees for the purpose of restructuring the organization. It is considered that GM didnt build Oshawa rather Oshawa built General Motors. This round of job cuts shouldn't worry GM investors, Source: Jonathan Weiss / Shutterstock.com, One of Motor Citys most iconic names is joining the growing list of companies laying off workers. GM's EVs currently range from the mid-$20,000 Chevrolet Bolt models to the more than $100,000 Hummer vehicles. That means that, while no layoffs loom in the near future, GM is "being prudent in limiting our hiring to critical skill sets," Raynal added. The amount of customers buying cars in the U.S. is down, which has the company shifting focus toward other products. GM's full-year 2022 revenue came in at $156.7 billion, with net income attributable to stockholders of $9.9 billion and adjusted earnings before interest and tax at Ford reported second-quarter adjusted earnings of $3.7billion more than triple that of the same period a year ago,when the company had a gain of $1.1billion. (2011, May 17). https://www.freep.com/story/money/cars/general-motors/2019/02/05/gm-layoffs-severance-pay/2778167002/, Feb 5, 2019 GM was in the second day Tuesday of massive salaried job cuts across its North American offices, targeting about 4,000 workers as part of a , Messages relating to layoffs at General Motors are presented below the company info. Changes in these assumptions may have a material impact on the backtested returns presented. Two Wall Street Legends will reveal their #1 recommendations and full "roadmap" for navigating the coming AI revolution. GM stock will likely shake off the impact of layoffs and continue growing as the market rebounds. Notify me of follow-up comments by email. The letter said the cuts, which follow performance evaluations, wouldimpact a "small number of global executives and classified employees following our most recent performance calibration." But Barra said there continues to be good demand for GM's big pickups and SUVs, which deliver fat profits. Its adjusted profit margin was 9.2%, down 2.1 percentage points compared with the previous year. GM stock isnt reacting poorly to this news. Retrieved from https://www.cbsnews.com/news/gm-layoff-announcement-sparks-controversy/, Essays, U. The company has a "work appropriately" policy that gives employees flexibility to work where they want, when the work permits. As per my analysis, the Company is not obliged to prioritize the ancillary units that are affected by the layoffs and plant shutdowns than their own Company. That is usually seen as a positive sign. The logo of General Motors is seen in a file photo. 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