Stellantis was not happy about its less-than-stellar earnings report, which it delivered to shareholders last week. Their response this week: despite realizing more than $6 billion in first-half profits and year-end projections of double-digit margins, the company announced that it would soon begin announcing buyouts for its white-collar workers in the United States. This year, the company reported first-half revenue of $92.2 billion and earnings of $6.1 billion, down 48% in net profit from its first-half earnings in 2023.
“The company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues,” said Stellantis CEO Carlos Tavares.
The automaker – owner of the popular Jeep, Ram, Chrysler, Dodge, and Fiat brands – sent an email to employees Tuesday, July 30, explaining what they called the “2024 Voluntary Separation Program” is a preemptive measure to the possibility of eliminating jobs.
The email suggested that if the program doesn’t have a significant number of people who are willing to voluntarily separate, layoffs or job elimination could be the next step, despite not specifying an exact number of buyout participants they need to take the offer.
“We wanted to give you some advance notice so you can thoughtfully consider whether this opportunity might be of interest to you. As always, we would prefer to meet our strategic headcount objectives through natural attrition and voluntary programs,” the email read. “Transparently, it is important to note that subsequent involuntary actions may be necessary if we do not meet our objectives through voluntary means.”
According to a Detroit Free Press, Stellantis has previously announced that it has more than 11,000 U.S. non-bargaining unit employees. In a follow-up statement, the automaker explained why they are making this buyout offer to their employees:
“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 statement said. “One of those actions is offering a voluntary separation package to U.S. employees in certain functions. More detailed information will be provided to eligible employees in mid-August.”
People who accept the buyout won’t leave empty handed, according to the email.
“In addition to severance based on years of service as of Sept. 30, 2024, the program is to provide a lump sum cash payment to cover health care costs, outplacement services for three months, and vesting of the 3% company contributions to 401(k)s for those with less than three years of vesting service.”
The company is expected to follow up individually with specific buyout offers to employees who are eligible for the program.