American automobile giant General Motors was on the brink of bankruptcy after the economic bloodbath of 2008, when the government spent $50 billion to rescue it. Years later in 2014, the US administration revealed that it was hit by a $11.2 billion loss due to the bailout, which had managed to save 1.5 million people from unemployment. But in the face of another global recession, General Motors has also joined tech firms on the layoff bandwagon, and will reportedly fire 500 people.
Hundreds hit by a small cost cutting exercise
The number of employees to be affected will be a small fraction of GM's 71,000 workforce, but still hundreds will be hit by performance-linked job cuts. Like every other firm firing employees, the layoff at GM is also aimed at increasing profits by reducing salary costs. An internal memo has been sent to the staff, according to the firm's Chief People Officer, and those hit have started leaving already.
Layoff bandwagon running over all sectors?
GM's job cuts, which mark the spillover of the layoff wave into the auto sector, come a month after its CEO Mary Barra reassured that people won't lose jobs. Speaking of reducing costs by $2 billion, she had mentioned lowering corporate overhead costs, while ruling out layoffs. She did mention that hiring would be slowed down, to only bring in new talent for strategically important roles.
Its main competitor in the auto market, Ford has also announced a layoff of 3,800 people in three years across Europe.
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