General Motors jobs cuts: 5000 employees take buyouts to leave company

General Motors co., has bought out 5,000 employees in a cost-cutting effort. According to Chief Financial officer Paul Jacobson this move will save $1 billion on an annual basis starting this year.

The buyouts were offered to all U.S. salaried staff with at least 5 years of experience at the company and for international executives who have worked for at leat 2 years in the company. As per Bloomberg Prime, the voluntary buyouts cover 6% of GM’s 81,000 white-collar employees and should allow the Detroit automaker to avoid involuntary dismissals.

"The company will take about a $1 billion charge in the first quarter, but that the downsizing will save the company about $1 billion on an annual basis", said Paul Jacobson at Bank of America conference in New York. Jacobson also added that the company encourages the employees to consided the buyout.

GM in a statement mentioned that involuntary job cuts are not a consideration at this point as a result of the voluntary reductions. The automaker announced its plans to buyout employees last month as an alternative to job cuts.

As per Bloomberg Prime, 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.