CEO of auto giant Stellantis Carlos Tavares speaks to journalists during a joint media event by Stellantis and Leapmotor in Hangzhou, in eastern China’s Zhejiang province on May 14, 2024.
– | Afp | Getty Images
DETROIT — Automaker Stellantis plans to once again reduce its U.S. employee headcount through a broad voluntary buyout, as the company attempts to reduce costs and boost profits.
In an email to employees Tuesday morning, the company said it would offer a voluntary separation program to nonunion U.S. employees at the vice president level “and below in certain functions.”
The company, which reported disappointing first-half results last week, said that if not enough employees participate in the buyout, involuntary terminations could follow. The message said eligible employees will be sent an email in mid-August with instructions on how to access their individualized offers.
Stellantis confirmed the buyout program, which was first reported by Automotive News, early Tuesday afternoon.
“As Stellantis continues to address inflationary pressures and, importantly, provide consumers with affordable vehicles at the highest quality, we remain focused on taking the necessary actions to reduce our costs to protect the long term sustainability of the company,” the company said in an emailed statement.
Stellantis CEO Carlos Tavares has been on a cost-cutting mission since the company was formed through a merger between Fiat Chrysler and France’s PSA Groupe in January 2021. It’s part of his “Dare Forward 2030” plan to increase profits and double revenue to 300 billion euros ($325 billion) by 2030.
The cost-saving measures have included reshaping the company’s supply chain and operations as well as previous headcount reductions.
“With our commitment to executing our Dare Forward 2030 strategy, we must continue to adapt by streamlining operations and finding efficiencies that will enhance our competitiveness to ensure our future sustainability and growth,” the company said in the email Tuesday, which was viewed and verified by CNBC.
Several Stellantis executives previously described the earlier cuts to CNBC as difficult but effective. Others, who spoke on the condition of anonymity due to potential repercussions, described them as grueling to the point of excessiveness.
Tavares last week pushed back on the claim that the company’s massive cost-cutting efforts had created problems.
“When you don’t deliver for any reason … you may want to use a scapegoat. The budget cut is an easy one. It’s wrong,” Tavares said.
Stellantis has reduced headcount by 15.5%, or roughly 47,500 employees, between December 2019 and the end of 2023, according to public filings. Additional job cuts this year involving thousands of plant workers the U.S. and Italy have drawn the ire of unions in both countries.
The automaker last conducted a voluntary buyout program in November, offering the deals to roughly half of its U.S. white-collar employees.
Automakers have been attempting to lower costs and boost profits and cash reserves to pay for new technologies such as all-electric vehicles.
For example, GM last year offered voluntary buyouts to a “majority” of its U.S. white-collar employees.
For its part, Ford Motor last year conducted involuntary layoffs, primarily affecting engineering jobs in the U.S. and Canada, as the automaker sought to cut billions in a restructuring of its business operations.