Multinational automaker Stellantis announced on April 26 that it is offering voluntary separation packages to about 33,500 US employees as it aims to cut costs.
The news emerged from a Wednesday report in The Wall Street Journal, mentioning an internal company email from Stellantis North American CEO Mark Stewart.
Stellantis offers the buyouts to the following group of employees:
- 31,000 hourly workers with at least one year of employment
- 2,500 salaried, nonunion employees with 15 or more years with the company
Apart from that, the program will extend to Canadian employees. However, the automaker has not yet disclosed the number.
Stellantis ascribes electrification for the buyouts
Stellantis seems to be blaming electrification costs for the massive buyout. In the memo, CEO Stewart emphasized the intense competition in the industry.
“The competition is fierce, and the cost of electrification cannot be passed on to the customer.”
Stellantis North American CEO Mark Stewart via The Wall Street Journal
Notably, the French PSA Group and Fiat Chrysler merger formed Stellantis, which intends to sell 25 all-electric vehicles in the US by 2030. Stellantis is investing at least $35 billion in EVs.
According to Stellantis’ spokeswoman, the company is offering the buyouts to 31,000 hourly employees and 2,500 salaried employees in the US. However, it can also extend to other Canadian employees. In hindsight, Stellantis already implemented the same buyouts to salaried US workers last fall.
Voluntary separation packages
Stellantis offers two different packages to the affected employees. First, union-represented workers will get a $50,000 pension, assuming they were employed before the firm and United Auto Workers union’s October 2007 contract agreement. CNBC notes that the offer will also be based on their seniority in the company.
Meanwhile, employees with at least one year of service will be eligible for the other buyout scheme, which will award payouts based on length of service.
“In response to today’s increasingly competitive global market conditions and the necessary shift to electrification, Stellantis is thoroughly reviewing its North American operations to improve efficiency, reduce costs and protect the competitiveness of our products to allow for further strategic investments to support our transformation.
These voluntary programs are being offered to provide a favorable option to employees looking to pursue new opportunities, while preserving critical roles the Company needs in order to maintain its competitive advantage.”
Stellantis spokesperson told Insider via email
See Also:
- Lucid Group to layoff 18% of employees, including executives
- Tesla grew its workforce by 28% in 2022 despite waves of layoffs in the tech industry
- Ford plans layoffs to focus on electrification, incites unions in Europe
- Tesla reported to conduct a round of layoffs and a hiring freeze
- Tesla spikes up hiring efforts after layoffs and hiring pause
As of now, it is unclear if Stellantis would execute forced layoffs if insufficient workers accepted the buyout offers. It currently has around 56,000 employees across the United States.
