WASHINGTON (WSJ) - General Motors terminated “several hundred” contract employees who worked at its Global Technical Center in Warren as well as other locations this weekend in its bid to shave $2 billion from its budget by the end of next year.
The cuts come nearly a month after 5,000 salaried employees agreed to a voluntary separation package that GM said would help it achieve close to 50% of its cost-cutting target this year alone and prevent further involuntary cuts.
GM spokeswoman Maria Raynal confirmed to the Detroit Free Press on Monday that the automaker terminated “several hundred” contract workers Saturday, effective immediately. Most were full-time, she said. Raynal could not specify the other locations where people were terminated because contract employees are spread out across the organization.
Business expert Erik Gordon of the University of Michigan’s Ross School of Business said terminating contract employees is something many corporations do to save money.
“GM, like its other Detroit 3 competitors, struggles continually to realign its cost structure to shift from internal combustion to electrification,” Masters said. “This will require cuts in the salaried and hourly workforces, the contracted workforce, and the disposing of obsolete production assets as result of the shift. This is not a stationary but rather a moving target, and these kinds of adjustments can be expected as a pace of transition accelerates.”