update: For latest announcement on GM layoffs read my latest post.
GM Layoffs and PAY CUT - Salary CutGeneral Motors has finally confirmed the news that had already been floating for a while - about 10,000 salaried GM employees will be fired. GM currently employes around 73000 people worldwide. The job cut amounts to reducing its total workforce by a whopping 13.7% ! GM had indicated earlier this month that it might cut upto 5000 jobs, but this number has been later revised and doubled ! Of the 10000 planned job cuts, 3,400 jobs will be cut in the US and the remaining worldwide.
Reduction in Salary: Moreover, GM has also announced a 'temporary pay reduction' in majority of the US salaried employees starting May 1 2009. The announcement does not give any specific information about pay cut for employees located outside the US. Details of GM Pay Cuts are as follows:
- Executives may see 10% of reduction in pay.
- 'Several Other employees' will see a reduction in their pay of 3% to 7%.
Reasons for GM Job Layoff and Pay CutGM has been trying hard for a US Govt. Aid since late last year. In a plan submitted to the US congress at the end of 2008. Following quotes from Nytimes:
GM had proposed a restructuring and cost cutting plan. GM faces a Feb. 17 deadline to present a plan to the government showing the wounded automaker can become viable. GM has received $9.4 billion from the Treasury Department and expects to get $4 billion more, but the government can demand repayment March 31 if it determines the company can't become viable.
GM reported a $2.5 billion loss in the third quarter alone and said it burned through $6.9 billion in cash during that period, adding to urgent warnings that it would run out of cash without government aid.