Local media sources report that the Brazilian subsidiary of GM has suspended the layoff of 700 workers at its Sao Caetano do Sul plant, located in the greater Sao Paulo metropolitan area. The news follows a similar move by Scania.

The layoffs were part of measures to cut costs and production in response to sluggish demand.

GM has proposed a reduction in weekly work hours, to 32 from 40, starting Aug 8. Additionally, the company is expected to launch a voluntary redundancy program in order to meet personnel reduction targets.

Under the agreement laid out by GM, the reduction in work hours would last until Oct 30.

In the event sales don’t improve after October, GM would then resort to a temporary layoff from November until March, with a 20% reduction in salaries.

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Last week, GM announced the layoff of 808 employees. These included 108 temporary workers. Although the company reversed the dismissal of 700 workers, all 108 temps will be laid off at end-July.