Investors are applauding General Motors’ plans to slash jobs and cancel certain car models.
The automaker’s stock was up nearly 6% as of 12:30 p.m. ET after the company said the biggest restructuring it has undertaken in over a decade would result in annual savings of roughly $6 billion by 2020.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” said Mary Barra, GM’s chairman and CEO, in a statement. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
To achieve that, GM will reduce its number of salaried employees by 15% and is cutting its executive workforce by 25%. The company also announced five assembly and propulsion plants will be “unallocated” in 2019—and said it will shut down operations of two more plants outside of North America by the end of next year.
Beyond the staff reductions, cancellations of car lines and production plant shutdowns, GM also announced it plans to double the amount of resources it plans to allocate to electric and autonomous vehicles in the next two years. Investors seemingly share the company’s faith that those investments will better position it for the future.