It’s never a good time to discuss layoffs, but doing so during the holiday season makes for a bad optic. And General Motors did so the first workday back after Thanksgiving.
Officially, GM isn’t cutting an estimated 15,000 jobs merely to trim operations. The move is part of a larger plan to “transform [the company] for the future,” according to the company. That plan was unveiled in 2015.
Though the cuts were deeper “than might have been expected,” says kGlobal partner Gene Grabowski, they “should have come as no surprise to anyone watching the automotive industry for the past two years.” [Also see Update at the bottom of this story.]
Still, even a cursory look at the 700-word statement GM issued Monday makes it clear that staff reductions will be critical to what the company considers its transformative future, along with production of autonomous cars and electric vehicles.
Delaying Bad News
GM waits until the second paragraph to mention job cuts. “Today, GM is continuing to take proactive steps to improve overall business performance including the reorganization of its global product development staffs, the realignment of its manufacturing capacity and a reduction of salaried workforce” [our emphasis].
Toward the bottom of the statement, GM spells out the impending job cuts, naming the five assembly and propulsion plants that will be “unallocated” in 2019 [that's business-speak for closing]. Three plants outside N. America also will be shuttered, though only one is named in the statement. This means GM's workforce outside the U.S. will be nervous until more information is released. Several models of cars will cease production. Those models are named in a fact sheet.
Both line workers and executives will be hit. "Actions are being taken to reduce salaried and salaried contract staff by 15 percent, which includes 25 percent fewer executives to streamline decision making."
GM Chairman/CEO Mary Barra adds, "These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle." The rest of her comments note the financial repercussions of the announced actions. This leads to our first takeaway:
Takeaway 1: Factor in Sympathy
While Barra’s statement wasn’t directed at employees, there’s not a word in it that offers sympathy to those who will lose their jobs.
As kglobal's Grabowski says, “Barra could have positioned the resulting job cuts in a more humane way." He adds that she could have "used language that was less focused on the corporation and the industry and more focused on thanking employees for their contribution to the success of one of America's best-known companies.”
Takeaway 2: Respect the Workforce
The needs of the workforce should be paramount. This includes departing and remaining staff. While severance is important to departing employees, remaining employees will watch carefully how a firm treats their former colleagues as an indicator of how it might treat them in the future. In the case of GM, remaining employees likely will be walking on eggshells. This seems like a crucial lesson.
Takeaway 3: Timing is Critical
If possible, inform employees about restructuring news before rumors or stories reach the media. While GM's job cuts are expected to begin later this year, its announcement should have come well before the holiday season.
Takeaway 4: Create a Timeline
Speaking of timing, creating a timeline is important. While there likely will be unknowns when a restructuring announcement is made, it's important to let employees know “when the company will make staffing decisions, how long it will take to transition responsibilities and at what point the process will be complete,” says Christopher Hannegan, a partner at the Brunswick Group. “Employees need to know when they can stop bracing for more cuts, at least in the short term.”
Takeaway 5: Credibility Takes Time
This takeaway borrows from crisis preparation. When a crisis begins is not the time to formulate a crisis plan. Similarly, it's crucial to have an established reputation for credible communications with employees before a restructuring gets underway. A restructuring is not the time for communications to begin building its reputation with employees.
Takeaway 6: What to Communicate
What employees [who still have jobs after a layoff] want to know is how the reorganization will change their lives, their workload, their team and the company, in that order, says Brian Ames, who recently retired as Boeing's VP of communications, after more than 30 years. Ames also advises avoiding jargon and business-speak in restructuring communications. GM clearly missed that lesson with its opaquely worded statement.
Update (Nov. 28, 2018): Prior to the job cuts announcement, GM offered buyouts to 17,700 workers. Just 2,200 accepted.
Seth Arenstein is editor of PR News. Follow Seth: @skarenstein