GM to cut 5,000 jobs by November: WSJ

Written by Agencies | New York, July 31: | Updated: Aug 1 2008, 02:40am hrs
US auto major General Motors, which is expected to record huge losses in the second quarter, will slash 5,000 jobs by November as part of its cost-cutting efforts, a media report said on Thursday.

According to The Wall Street Journal, the job cut would account for nearly 15 per cent of the company's white-collar workforce in North America.

"General Motors Corporation, which is expected to post a big second-quarter loss on Friday, said it will remove about 5,000 people from its salaried head count by November 1 as part of a cost-cutting initiative it outlined earlier this month," the newspaper said in an article published in its online edition on Thursday.

The report said that the auto maker also confirmed plans to scale back its vehicle-leasing operations, which could further crimp US sales.

"The headcount move is part of a 20 per cent reduction GM plans for its North American white-collar cost structure this year. It plans to save 10 billion dollars over the next 17 months. GM will also suspend the dividend, cut capital spending and trim retiree benefits to meet its target," the report added.

The Wall Street Journal reported that General Motors hopes that the early-retirement incentives would persuade workers to leave voluntarily.

General Motors is expected to roll out offers soon that would include both cash incentives and the chance for some to leave early with full pension benefits.

"GM has cut its white-collar work force 40 per cent since 2000, to about 32,000 employees," the report noted.

Earlier this month, the company had said that would "report a significant second quarter loss."