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The General Motors CFO basically said as much on an investor call in 2022 or 2023. That didn't get rid of enough people, so now they've implemented stack rankin

The General Motors CFO basically said as much on an investor call in 2022 or 2023. That didn't get rid of enough people, so now they've implemented stack ranking because that worked so well at MSFT. That said, they get a "free" 5% workforce reduction every year that they want it, no severance, no buyout, just let go. There will be more of that coming, particularly in US automotive after the UAW deal and the current sad state of vehicle sales and the write downs on EVs.

drewcoo 2y ago
> stack ranking because that worked so well at MSFT Rank and yank originated at GE to the best of my knowledge. Where it also "worked well." https://en.wikipedia.org/wiki/Vitality_curve https://en.wikipedia.org/wiki/Vitality_curve
- downrightmike 2y ago
  Neutron Jack was a terrible manager, he just got lucky and because GE was so big, it was nearly impossible to sink
myworkinisgood 2y ago
How come no severance? Despite of how you're being fired, you should be entitled to severance right?
- persedes 2y ago
  in the US at least, I'd be surprised if you entitled to anything, especially in a "right to work" state. It's mostly goodwill.
- SR2Z 2y ago
  Severance is a "we'll pay you to leave quietly" deal, not an entitlement. If the company plans to be continually laying people off (kind of a stupid idea because it makes your other employees nervous) they can find other ways to ensure silence from their victims.
  - xkqd 2y ago
    > kind of a stupid idea because it makes your other employees nervous And in the medium and long term solidifies a self-serving culture rather than individuals working towards the group’s and firm’s success.
- Liquix 2y ago
  perhaps this 5% is employees who were documented underperforming, breaking rules, getting into conflicts, gaming at work, etc. ehe company has every right to let them go without severance. usually referred to as "regretted attrition" which is ironic in this case because GM doesn't regret them leaving in the slightest.
  - xkqd 2y ago
    And in my experience you run out of those individuals rather quickly and start cutting well-intended employees after only a few years. After that, you start firing hard working individuals who can’t or won’t play the game. After that, you’re selecting for corporate psychopaths.
  - consteval 2y ago
    Pitting your employees in a hunger games-esque charade is sure to have unintended consequences. Surely, if I was an employee here, self-preservation would be of the utmost importance. If I fix something to make my job easier, I will keep it to myself. If I have the opportunity to sabotage a teammate, I would. If I can lie easily, I will.
- wnolens 2y ago
  There is no entitlement in any country/state/province I've ever worked. You can quit at any time and your employer can fire you at any time - no reason needed either way https://www.ncsl.org/labor-and-employment/at-will-employment-overview https://www.ncsl.org/labor-and-employment/at-will-employment...
- PeterStuer 2y ago
  Which is exactly why they will try to bully you into quitting rather than fire you in jurisdictions with strong firing compensation/protection regulation.
- wcunning 2y ago
  They have a new performance rating system that says that 5% of every team should be ranked as "needs improvement" meaning an automatic PIP. When MSFT did this in the 2000's, it was a requirement to fire that group. Firings for performance do not entitle an employee to severance, but official "layoffs" generally do outside of bankruptcy. Net cost of this move is hidden in employees spending time updating resumes and doing job interviews, not in direct bottom line dollars from actually paying out severance.
  - mrgoldenbrown 2y ago
    The other hidden cost is the paranoia and backstabbing that is encouraged when someone in every team has to be fired even if everyone did objectively excellent work.
    - throwaway7ahgb 2y ago
      Paranoia and backstabbing happens everywhere. What happens if stack rank->pip is too obvious is that people and teams will not cooperate with newer fresh meat. They're incentivized to keep knowledge protected for their job. New people struggle to get above the pip mark and it becomes a revolving door.
  - gamblor956 2y ago
    Firings for performance do not entitle an employee to severance, This keeps getting repeated on this thread but its not true. U.S. WARN laws require severance or 60 days notice for mass layoffs (which would definitely include 5% of a company as large as GM). Only terminations for cause are exempted, and performance is only grounds for cause in a very small handful of "right to work" states.
    - mystified5016 2y ago
      The point is that this move isn't a mass layoff. It's not a layoff at all, it's firing "under-performing" employees. QED no entitlement.
resource_waste 2y ago
How do they get away with no severance?
- mrgoldenbrown 2y ago
  There's nothing to get away with, severance is purely optional (in the US at least). What country are you in that requires severance pay?
  - Toutouxc 2y ago
    Not who you asked, but where I live, the law prescribes three levels of severance pay (one to three months of pay, depending on your time with the company) for all layoffs. Obviously not if you get fired.
slowmovintarget 2y ago
The sad state of vehicle sales has mostly to do with the outrageous increases in new car prices that go way beyond transmission of supply chain costs and dance right on in to price gouging territory. The prices still have not corrected to something sane according to the actual inflation curve. The average price of a new car these days is $48K. This is insane. For that price tag to make any kind of sense at all, you have to have an income of nearly half a million per year. Median household income in the U.S. is around $75K meaning most of these households, if they're even purchasing a vehicle at all, would be buying used. It would mean financial ruin to borrow two-thirds of your income for a car. The automakers have forgotten Henry Ford's lesson. He payed his workers enough so they could each afford the products he was selling. Our companies don't pay their employees enough to afford their products any more. <Surprised Pikachu!> Sales are down.
- wcunning 2y ago
  1000% agreed -- I worked for Ford and GM and now work for a different vehicle software company, and the salary I made starting out + the employee discount meant that vehicles were affordable, but not fun to afford. Now, I can't upgrade my F150 to something with more towing capacity and couldn't even while working at GM with their employee discount and somewhat lower truck prices in general compared to the other Big Three. The problem is corporate culture related, but it's also contributed to by the safety regs requiring every car to have a bunch of driver assist things that drive up total cost even on low end cars, meaning that the mid and high end need to be super profitable for overall fleet profit to be acceptable.
- mrguyorama 2y ago
  How is that average calculated though? If everyone switches from buying the $40k Camry to the $85k F150, prices didn't have to change for the "average price of a new car" to increase. This isn't a dismissal since we can compare every model year to the previous and see an increase YoY in prices without serious improvements to the underlying product. We have also seen everyone going from sedans to trucks though. >It would mean financial ruin to borrow two-thirds of your income for a car. The automakers have forgotten Henry Ford's lesson. He payed his workers enough so they could each afford the products he was selling. I agree but the problem is that business owners don't like how much money comes from that system and prefer competing for people's lines of credit, because an economy where everyone has $40k in debt literally has more money sloshing around it than one where everyone buys their car outright, and that means more profit, which is the entire goal of every CEO everywhere, so of course every CEO wants you to go into debt for them. Unfortunately, a lot of people can leverage themselves farther than they can actually afford for long enough that some CEO can extract profit before the entire system collapses. A shitload of profit and CEO salary was made in the run up to 2008, and none of the people who extracted that wealth from the system went to jail, so why are we surprised they're trying to do it again? Scientology managed to distill this down to the bones; They simply had people sign up for credit cards and max them out buying scientology stuff. Since the penalty for debt goes to the people who took it, instead of the place the money the debt went, there's infinite incentive to do this. CEOs look at that system and get extremely jealous.
gamblor956 2y ago
I listened to the entirety of the investor call and the GM CFO definitely does not call it a "free" workforce reduction. The stack ranking is primarily about rewarding high-performing employees with higher bonuses. It also puts a low-performing employee at risk of getting let go, but it doesn't magically absolve GM of its unemployment law obligations, because any layoff pursuant to this planned workforce reduction would be grouped together and at GM's size the 5% reduction would trigger WARN Act obligations long before they got to 5%. Seriously guys: if stack ranking were a magical way to avoid the WARN Act or other unemployment laws every company would be claiming that layoffs were performance based. That no company tries to claim performance as the basis for avoiding severance should tell you something about how the law works...

drewcoo 2y ago

> stack ranking because that worked so well at MSFT Rank and yank originated at GE to the best of my knowledge. Where it also "worked well." https://en.wikipedia.org/wiki/Vitality_curve https://en.wikipedia.org/wiki/Vitality_curve

downrightmike 2y ago
Neutron Jack was a terrible manager, he just got lucky and because GE was so big, it was nearly impossible to sink

myworkinisgood 2y ago

How come no severance? Despite of how you're being fired, you should be entitled to severance right?

persedes 2y ago
in the US at least, I'd be surprised if you entitled to anything, especially in a "right to work" state. It's mostly goodwill.
SR2Z 2y ago
Severance is a "we'll pay you to leave quietly" deal, not an entitlement. If the company plans to be continually laying people off (kind of a stupid idea because it makes your other employees nervous) they can find other ways to ensure silence from their victims.
- xkqd 2y ago
  > kind of a stupid idea because it makes your other employees nervous And in the medium and long term solidifies a self-serving culture rather than individuals working towards the group’s and firm’s success.
Liquix 2y ago
perhaps this 5% is employees who were documented underperforming, breaking rules, getting into conflicts, gaming at work, etc. ehe company has every right to let them go without severance. usually referred to as "regretted attrition" which is ironic in this case because GM doesn't regret them leaving in the slightest.
- xkqd 2y ago
  And in my experience you run out of those individuals rather quickly and start cutting well-intended employees after only a few years. After that, you start firing hard working individuals who can’t or won’t play the game. After that, you’re selecting for corporate psychopaths.
- consteval 2y ago
  Pitting your employees in a hunger games-esque charade is sure to have unintended consequences. Surely, if I was an employee here, self-preservation would be of the utmost importance. If I fix something to make my job easier, I will keep it to myself. If I have the opportunity to sabotage a teammate, I would. If I can lie easily, I will.
wnolens 2y ago
There is no entitlement in any country/state/province I've ever worked. You can quit at any time and your employer can fire you at any time - no reason needed either way https://www.ncsl.org/labor-and-employment/at-will-employment-overview https://www.ncsl.org/labor-and-employment/at-will-employment...
PeterStuer 2y ago
Which is exactly why they will try to bully you into quitting rather than fire you in jurisdictions with strong firing compensation/protection regulation.
wcunning 2y ago
They have a new performance rating system that says that 5% of every team should be ranked as "needs improvement" meaning an automatic PIP. When MSFT did this in the 2000's, it was a requirement to fire that group. Firings for performance do not entitle an employee to severance, but official "layoffs" generally do outside of bankruptcy. Net cost of this move is hidden in employees spending time updating resumes and doing job interviews, not in direct bottom line dollars from actually paying out severance.
- mrgoldenbrown 2y ago
  The other hidden cost is the paranoia and backstabbing that is encouraged when someone in every team has to be fired even if everyone did objectively excellent work.
  - throwaway7ahgb 2y ago
    Paranoia and backstabbing happens everywhere. What happens if stack rank->pip is too obvious is that people and teams will not cooperate with newer fresh meat. They're incentivized to keep knowledge protected for their job. New people struggle to get above the pip mark and it becomes a revolving door.
- gamblor956 2y ago
  Firings for performance do not entitle an employee to severance, This keeps getting repeated on this thread but its not true. U.S. WARN laws require severance or 60 days notice for mass layoffs (which would definitely include 5% of a company as large as GM). Only terminations for cause are exempted, and performance is only grounds for cause in a very small handful of "right to work" states.
  - mystified5016 2y ago
    The point is that this move isn't a mass layoff. It's not a layoff at all, it's firing "under-performing" employees. QED no entitlement.

resource_waste 2y ago

How do they get away with no severance?

mrgoldenbrown 2y ago
There's nothing to get away with, severance is purely optional (in the US at least). What country are you in that requires severance pay?
- Toutouxc 2y ago
  Not who you asked, but where I live, the law prescribes three levels of severance pay (one to three months of pay, depending on your time with the company) for all layoffs. Obviously not if you get fired.

slowmovintarget 2y ago

The sad state of vehicle sales has mostly to do with the outrageous increases in new car prices that go way beyond transmission of supply chain costs and dance right on in to price gouging territory. The prices still have not corrected to something sane according to the actual inflation curve. The average price of a new car these days is $48K. This is insane. For that price tag to make any kind of sense at all, you have to have an income of nearly half a million per year. Median household income in the U.S. is around $75K meaning most of these households, if they're even purchasing a vehicle at all, would be buying used. It would mean financial ruin to borrow two-thirds of your income for a car. The automakers have forgotten Henry Ford's lesson. He payed his workers enough so they could each afford the products he was selling. Our companies don't pay their employees enough to afford their products any more. <Surprised Pikachu!> Sales are down.

wcunning 2y ago
1000% agreed -- I worked for Ford and GM and now work for a different vehicle software company, and the salary I made starting out + the employee discount meant that vehicles were affordable, but not fun to afford. Now, I can't upgrade my F150 to something with more towing capacity and couldn't even while working at GM with their employee discount and somewhat lower truck prices in general compared to the other Big Three. The problem is corporate culture related, but it's also contributed to by the safety regs requiring every car to have a bunch of driver assist things that drive up total cost even on low end cars, meaning that the mid and high end need to be super profitable for overall fleet profit to be acceptable.
mrguyorama 2y ago
How is that average calculated though? If everyone switches from buying the $40k Camry to the $85k F150, prices didn't have to change for the "average price of a new car" to increase. This isn't a dismissal since we can compare every model year to the previous and see an increase YoY in prices without serious improvements to the underlying product. We have also seen everyone going from sedans to trucks though. >It would mean financial ruin to borrow two-thirds of your income for a car. The automakers have forgotten Henry Ford's lesson. He payed his workers enough so they could each afford the products he was selling. I agree but the problem is that business owners don't like how much money comes from that system and prefer competing for people's lines of credit, because an economy where everyone has $40k in debt literally has more money sloshing around it than one where everyone buys their car outright, and that means more profit, which is the entire goal of every CEO everywhere, so of course every CEO wants you to go into debt for them. Unfortunately, a lot of people can leverage themselves farther than they can actually afford for long enough that some CEO can extract profit before the entire system collapses. A shitload of profit and CEO salary was made in the run up to 2008, and none of the people who extracted that wealth from the system went to jail, so why are we surprised they're trying to do it again? Scientology managed to distill this down to the bones; They simply had people sign up for credit cards and max them out buying scientology stuff. Since the penalty for debt goes to the people who took it, instead of the place the money the debt went, there's infinite incentive to do this. CEOs look at that system and get extremely jealous.

gamblor956 2y ago

I listened to the entirety of the investor call and the GM CFO definitely does not call it a "free" workforce reduction. The stack ranking is primarily about rewarding high-performing employees with higher bonuses. It also puts a low-performing employee at risk of getting let go, but it doesn't magically absolve GM of its unemployment law obligations, because any layoff pursuant to this planned workforce reduction would be grouped together and at GM's size the 5% reduction would trigger WARN Act obligations long before they got to 5%. Seriously guys: if stack ranking were a magical way to avoid the WARN Act or other unemployment laws every company would be claiming that layoffs were performance based. That no company tries to claim performance as the basis for avoiding severance should tell you something about how the law works...