Auto giant Stellantis' Chief Executive Officer Carlos Tavares speaks to reporters during a joint press event of Stellantis and Leapmotor in Hangzhou, east China's Zhejiang Province, May 14, 2024.
– | Afp | Getty Images
DETROIT – Automobile manufacturer Stellantis plans to further reduce its U.S. workforce through a broad voluntary buyout as the company seeks to cut costs and boost profits.
In an email to employees Tuesday morning, the company said it would offer a voluntary separation program to nonunionized U.S. employees at the vice president level “and below in certain functions.”
The company, which last week reported disappointing first-half results, said that if not enough employees participated in the buyout program, involuntary layoffs could occur. The message said that eligible employees would receive an email in mid-August with instructions on how to access their individualized offers.
Stellantis confirmed the purchase program, which was first reported by Automotive News early Tuesday afternoon.
“As Stellantis continues to address inflationary pressures and, more importantly, provide consumers with affordable vehicles of the highest quality, we remain focused on taking the necessary steps to reduce our costs and 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 French group PSA in January 2021. It is part of his “Dare Forward 2030” plan to boost profits and double revenue to 300 billion euros by 2030.
Cost-saving measures have included restructuring the company's supply chain and operations, as well as previous staff reductions.
“With our commitment to execute on our Dare Forward 2030 strategy, we must continue to adapt by streamlining operations and finding efficiencies that improve our competitiveness to ensure our future sustainability and growth,” the company said in Tuesday's email, which was viewed and verified by CNBC.
Several Stellantis executives previously described the cuts to CNBC as difficult but effective. Others, who spoke on condition of anonymity because of potential repercussions, described them as grueling to the point of being excessive.
Last week, Tavares refuted the claim that the company's massive cost-cutting efforts had created problems at the automaker.
“When it is not met for whatever reason… it is possible that they want to resort to a scapegoat. Budget cuts are easy to do. It is a mistake,” Tavares said.
Stellantis has cut its workforce by 15.5%, or about 47,500 employees, between December 2019 and the end of 2023, according to public documents. Additional job cuts this year affecting thousands of workers at plants in the United States and Italy have drawn the ire of unions in both countries.
Stellantis last ran a voluntary buyout program in November, offering deals to about half of its white-collar employees in the United States.
