Automobile giant General Motors has declared major downsizing, with well over 1,000 salaried workers to lose their jobs across the world in the Software and Services department. This decision, which was affirmed on August 19, impacts about 600 employees at GM tech centre in Warren, Michigan. The dismissals are part of a restructuring exercise that seeks to cut costs and improve performance in the division.
In a statement, GM noted that the company needed to reduce its complexity to spur speed and quality improvement. “As we chart the future of GM, we need to be brave and target the areas where we will have the most impact,” it said. This restructuring is not only to reduce expenses but also because of the change in leadership and operational reviews after Mike Abbott, the division’s EVP, resigned in March due to health issues.
Abbott was hired from Apple to spearhead GM’s software development efforts as the automaker intensified its efforts on electric vehicles and subscription services. His departure led to a rethink of the division’s structure, headed by Baris Cetinok, and Dave Richardson, both of whom have worked with Apple. The new leadership has decided that some teams in the Software and Services organization which has elements like vehicle infotainment, OnStar services, and GM’s Super Cruise advanced driver-assist system will be slashed.
The dismissals are roughly one percent of the company’s workforce, according to the company’s filing with the US Securities and Exchange Commission. 3% of GM’s global salaried employees, which was 76 000 people at the end of 2023. Those employees who were targeted in the layoffs received the news on the same day that the company’s management made the announcement, a major change within the organization as it faces difficulties in the automobile business.
These job losses come at the backdrop of worries regarding the future of the automotive industry, especially for companies like General Motors that recently had software problems with their Chevy Blazer EV. This vehicle had issues like blank infotainment screens and charging errors. The company had given a stop-sale notice in December as a result of these difficulties, and the notice was withdrawn in March. Furthermore, in January this year, GM decided to cancel the Ultra Cruise program, which is a rival to the Full Self-Driving system by Tesla. This is a sign of the constant reshuffling going on in the company to support its Super Cruise technology.
However, GM has not lost sight of the goal to improve the functions of hands-free driving and is set to boost it by the end of the year 2025. The company’s stock rose marginally after the announcement of the lay-offs, showing that investors have faith in GM’s plans even as it reorganizes.
