Shares of General Motors Company (NYSE: GM) are in the red this morning after the legacy automaker said it expects to take about a $1.0 billion charge in the first quarter.
GM wants to lower costs by $2.0 billion
On Tuesday, the car company confirmed about 5,000 of its white-collar workers agreed to a buyout programme it announced last month.
That will lower the headcount sufficiently to avoid layoffs, as per CFO Paul Jacobson. The said programme will result in a $1.0 billion charge this quarter but will participate longer term in the company’s plans to lower its structural costs by $2.0 billion over the next two years, he added.
GM had originally expected between 30% to 50% of those savings to realize in 2023. Following today’s development, CFO Jacobson now expects savings to print near the higher end of that range.
General Motors’ EV sales hit a record
General Motors plans on sharing details of the buyout programme on its Q1 earnings call.
In March, the automaker had offered a voluntary buyout to its salaried employees who had worked at GM for at least five years. Executives could opt to participate in the programme if they had worked at the company for two years.
The stock market news arrives a day after General Motors reported an 18% year-on-year increase in its first-quarter U.S. sales. Sales for its electric vehicles also hit an all-time high in Q1.
Versus its year-to-date high, GM shares are down nearly 20% at writing.
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Wajeeh Khan
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