Jeep-maker Stellantis is offering buyouts to some of its most senior employees — and blaming it on EVs

• Stellantis is offering thousands of employees buyout packages, The Wall Street Journal reported.
• The move comes weeks after crosstown rival General Motors offered employees buyouts.

A new round of buyouts is hitting the legacy auto industry.

Stellantis — which owns brands like Jeep, Chrysler, Dodge, and Ram — is offering thousands of salaried and hourly workers voluntary separation packages, The Wall Street Journal reported Wednesday, citing an internal company email sent from Mark Stewart, the company's North American chief operating officer. The salaried employees getting the offers have 15 or more years of experience, according to the Journal.

In the memo, Stewart attributed the move to the EV transition, writing, "The competition is fierce, and the cost of electrification cannot be passed on to the customer," The Wall Street Journal reported.

Stellantis, which was formed out of the merger of the French PSA Group and Fiat Chrysler, is investing at least $35 billion dollars into EVs and plans to sell 25 all-electric cars in the US by 2030.

The buyouts will be offered to 31,000 hourly employees and 2,500 salaried workers in the U.S, though others could be impacted in Canada, a spokesperson told the Journal. Stellantis last offered buyouts to salaried US employees last fall.

"In response to today's increasingly competitive global market conditions and the necessary shift to electrification, Stellantis is thoroughly reviewing its North American operations to improve efficiency, reduce costs and protect the competitiveness of our products to allow for further strategic investments to support our transformation," a Stellantis spokesperson told Insider via email. "These voluntary programs are being offered to provide a favorable option to employees looking to pursue new opportunities, while preserving critical roles the Company needs in order to maintain its competitive advantage."

EVs are squeezing automakers hard

Amid the volatile economic climate, layoffs and buyouts have been hitting many industries hard, especially tech. But the impact of inflationary pressures and high interest rates has also hit incumbent automakers.

Pressure to cut costs is rising as car companies bet their futures on EVs, which haven't yet yielded substantial profits.

Stellantis' move comes not long after its crosstown rival GM offered a sweeping buyout program to a majority of its salaried workforce, an effort to save $2 billion by the end of 2024. GM later said about 5,000 workers accepted the offer.

Ford, meanwhile, already cut about 3,000 workers last summer amid the company's reorganizing of its gas-powered and electric vehicle businesses, and has signaled more could come.

Stellantis CEO Carlos Tavares has long been vocal about headwinds facing the global transition to EVs in terms of cost and materials needed.