General Motors reducing costs by laying off 500 employees

General Motors is laying off hundreds of workers which will affect 500 positions. The automaker made the decision as it is one way to reduce costs.

General Motors said that downsizing its workforce will help it save cash while also boosting profits. This plan was revealed earlier this week by a source who is familiar with the matter.

Moreover, the upcoming job cuts were also confirmed by the company’s chief human resources officer, Arden Hoffman, through a letter that was sent to employees. He said that GM is committed to achieving $2 billion in cost savings in the next two years, however, this plan also means layoffs, Fox Business reported.

It explained that to save, the reduction of its workforce and reorganizing to simplify its operations are unavoidable. The source said that global reductions are in the "low hundreds."

GM added that the decision follows the company’s “most recent performance calibration and supports managing the attrition curve as part of our overall structural costs reduction effort." It was reported that global executives and classified employees are affected by the job cuts that will continue based on location.

“We are looking at all the ways of addressing efficiency and performance,” CNN Business quoted Arden Hoffman as saying on Tuesday. “This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration. They will be departing the company starting from today.”

Meanwhile, it was reported that General Motors has been spending a substantial amount of money as it shifts its production from traditional gas-powered vehicles to pure electric vehicle lines. In fact, it is investing around $35 billion from now until 2025 as it works on the shift to EVs, with the aim of having its EV models by 2035.

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