General Motors on Tuesday said it would axe 10,000 salaried ‘white collar’ workers from the current 73,000 globally this year.


“These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability,” the automaker said in a statement. “GM outlined the need for the reductions in its restructuring plan submitted to Congress on 2 December, 2008. The announcement this week begins implementation of this aspect of the plan.”


GM said salaried employment reductions would vary by global region, “depending on the staffing levels in the region and market conditions. Details of the reductions and separation programs will be shared directly by regional leadership with the affected employees”.


About 3,400 of the 29,500 salaried employees in the US will be affected. These reductions will be made using separation programmes and policies, which provide for severance payments, benefit contributions and outplacement assistance. The majority of the reductions are expected to take place by 1 May.


GM also confirmed a temporary pay reduction for most US salaried employees from 1 May until the end of the year, when it will be reviewed. US executives will have base pay reduced 10%, and many other salaried employees will see reductions of 3% to 7%.


“Other countries are currently reviewing compensation and benefits for salaried employees,” GM added.


Reuters had noted earlier that, after GM’s January sales plunged 49% and the automaker said it expected industry-wide US sales to be near 10.5m vehicles this year, GM executives had said the company was looking for deeper and faster cost-cutting under the restructuring plan due to be submitted to the US Treasury under terms of its US$13.4bn bailout.


GM has offered buyouts to US manufacturing workers represented by the United Auto Workers union and remains in talks with both the UAW and bondholders to slash its outstanding debt, the news agency said.