Sunny skies have not been in the picture for Detroit Big Three automaker Stellantis lately.
Last week, the Jeep and Dodge automaker reported dismal results during its first-half 2024 earnings call. During the call, CEO Carlos Tavares blamed a "challenging industry context" and its own "operational issues" for the results and stated that the company will work to rebound.
Related: Which Stellantis brands will be the first to go?
"We have significant work to do, especially in North America, to maximize our long-term potential," Tavares said.
To help recoup losses of more than 48%, the automaker is taking some drastic measures to trim off some of its workforce, and according to a report by the Detroit Free Press, it's not being very subtle about its situation.
Stellantis wants to make a deal with its workforce
As per Freep, the owners of Jeep and Dodge are offering to buy out their salaried workforce across their sites in North America, aiming to trim their white-collar workforce not covered by the UAW contract.
In an email shared with Stellantis employees, the automaker offered employees below the vice-president level a package called the "2024 Voluntary Separation Program."
This package includes severance based on years of service as of Sept. 30, 2024, a lump sum cash payment to cover healthcare costs, three months of outplacement services, and vesting of their 401(k)s.
Eligible Stellantis employees were told to expect an email detailing their individual offers sometime in mid-August.
In an email to employees shared with the Detroit Free Press, Stellantis emphasized the importance of the Voluntary Separation Program to the company. They suggested that more drastic actions like layoffs would occur if not enough employees voluntarily take their buyout offers.
"We wanted to give you some advance notice so you can thoughtfully consider whether this opportunity might be of interest to you." Stellantis North America Senior Human Resources and Transformation VP Tobin Williams said.
"As always, we would prefer to meet our strategic headcount objectives through natural attrition and voluntary programs. Transparently, it is important to note that subsequent involuntary actions may be necessary if we do not meet our objectives through voluntary means."
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Stellantis' layoff bonanza
This isn't the first time that Stellantis has hung layoffs over its employee's heads.
In March 2024, the automaker laid off about 400 of its white-collar employees who were not part of the UAW's collective bargaining agreement using a very shady method.
On March 22, Stellantis reportedly sent out a notice to its employees informing them that it will implement a “mandatory remote work day” for “all U.S. Salaried Non-Bargaining Unit” employees in its engineering and technology departments.
BREAKING:
— Car Dealership Guy (@GuyDealership) March 22, 2024
Stellantis, the parent company of Chrysler, Jeep, Dodge, Ram, is sending notices to its employees about a “mandatory remote work day” on Friday.
The reason?
Your guess is as good as mine, but a notice like this (on a Thursday) could potentially signal layoffs.… pic.twitter.com/6rG9csCHBM
In the email, Stellantis claimed that the reason for the mandatory remote work day was because the company was holding an “important operational meeting that requires specific attention and participation” and that “employees are expected to work from home” unless a manager tells them otherwise.
Unfortunately, that "important operational meeting" was their meeting of doom, where they were informed that they were laid off.
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In a statement to the Detroit Free Press, Stellantis defended its latest moves as a necessary one in order to keep its operations going.
"As Stellantis continues to address inflationary pressures and, importantly, provide consumers with affordable vehicles at the highest quality, we remain focused on taking the necessary actions to reduce our costs to protect the long term sustainability of the company," the automaker said. "One of those actions is offering a voluntary separation package to U.S. employees in certain functions. More detailed information will be provided to eligible employees in mid-August."
Stellantis N.V., which trades on the New York Stock Exchange as (STLA) , fell 2.2% on August 1 for a closing share price of $16.32.
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