Stellantis, the multinational automaker formed through a merger between Fiat Chrysler and France’s PSA Groupe, has announced plans to further reduce its U.S. employee headcount. The company aims to cut costs and boost profits by offering a voluntary separation program to non-union employees at the vice president level and below in certain functions. If there is insufficient participation in the buyout program, involuntary terminations may follow. The eligible employees will receive personalized offers in mid-August.
This move comes after Stellantis reported disappointing first-half results last week. The company is facing inflationary pressures and is focused on providing consumers with affordable vehicles of the highest quality while reducing costs to ensure long-term sustainability. Stellantis CEO Carlos Tavares has been on a cost-cutting mission since the merger, aiming to increase profits and double revenue to 300 billion euros by 2030 under his “Dare Forward 2030” plan.
To achieve these goals, Stellantis has already implemented various cost-saving measures, including reshaping its supply chain and operations, as well as previous headcount reductions. The company emphasizes the importance of streamlining operations and finding efficiencies to enhance competitiveness and ensure future sustainability and growth.
While some Stellantis executives have described the earlier cuts as difficult but effective, others have expressed concerns about their excessive nature. However, Tavares has pushed back against claims that the cost-cutting efforts have led to problems within the automaker, stating that scapegoating budget cuts is an easy but incorrect explanation for any performance issues.
According to public filings, Stellantis has already reduced its headcount by 15.5% or approximately 47,500 employees between December 2019 and the end of 2023. This year, the company has announced additional job cuts involving thousands of plant workers in the U.S. and Italy, which have drawn criticism from unions in both countries.
This voluntary buyout program is not the first of its kind for Stellantis. The company previously conducted a similar program in November, offering the deals to around half of its U.S. white-collar employees.
In conclusion, Stellantis is taking further steps to reduce costs and improve profitability by offering a voluntary buyout program to its U.S. employees. The company’s CEO, Carlos Tavares, is committed to cost-cutting measures as part of the “Dare Forward 2030” plan. While these efforts have been effective in some aspects, concerns have been raised about their impact on the company. Stellantis aims to streamline operations and find efficiencies to enhance competitiveness and ensure future sustainability and growth.
