Stellantis, the automaker formed through the merger of Fiat Chrysler and France’s PSA Groupe, has announced plans to reduce its U.S. employee headcount through a broad voluntary buyout program. The move comes as the company seeks to cut costs and improve profitability in the face of disappointing financial results.
The voluntary separation program will be offered to non-union U.S. employees at the vice president level “and below in certain functions.” If an insufficient number of employees opt for the buyout, involuntary terminations may follow. Eligible employees will receive individualized offers via email in mid-August, outlining the terms of the program.
Company Statement
In response to inquiries about the buyout program, Stellantis emphasized the importance of addressing inflationary pressures while delivering high-quality, affordable vehicles to consumers. CEO Carlos Tavares has been leading the cost-cutting efforts since the merger in 2021, with the goal of increasing profits and doubling revenue by 2030.
Stellantis reiterated its commitment to the Dare Forward 2030 strategy, which involves streamlining operations and finding efficiencies to enhance competitiveness and ensure future sustainability and growth. The company views the buyout program as a necessary step in this process, despite the challenges it may pose to employees.
Reports suggest that previous rounds of headcount reductions at Stellantis were met with mixed reactions from employees. While some executives have described the cuts as difficult but effective, others have criticized the extent of the reductions as excessive and grueling. The company’s CEO, however, has defended the cost-cutting measures as essential for the company’s success.
Stellantis has already reduced its headcount by 15.5%, equating to approximately 47,500 employees, between December 2019 and the end of 2023. Additional job cuts affecting plant workers in the U.S. and Italy have sparked backlash from unions in both countries. A similar buyout program was offered to U.S. white-collar employees in November, indicating a pattern of workforce reductions at the company.
Stellantis’ decision to implement a voluntary buyout program for U.S. employees is a strategic move aimed at improving financial performance and ensuring long-term sustainability. While the program may result in job losses for some individuals, the company sees it as a necessary step in its cost-cutting efforts. The reaction from employees and unions will be crucial in determining the overall impact of the buyout program on Stellantis’ operations and workforce.