Tech layoffs: General Motors follows job cut trend, fires hundreds of workers to save costs
In 2023, many companies around the world faced economic challenges due to the Covid-19 pandemic and changing market conditions. As a result, a number of organisations implemented layoffs as a means of reducing costs and restructuring their businesses to stay competitive.
The latest brand to fire its workforce is General Motors (GM) which announced layoffs affecting hundreds of employees. Like many other businesses, GM has been affected by supply chain disruptions and shifting consumer demand patterns, which have impacted its revenue and profitability.
To address these challenges, the automaker company has taken a number of steps to cut costs, including reducing its workforce based on performance among its salaried employees and executives. These job cuts are likely to affect a small fraction of the company's workforce, stated GM, according to a report by Mint.
Meanwhile, CNBC reported that over 500 employees are expected to be affected by General Motors' job cuts. Though the organisation has not provided a specific number. The Detroit automaker currently has approximately 81,000 employees worldwide. In an internal memo, Chief People Officer Arden Hoffman notified employees of the cuts and noted that impacted workers have already begun to depart the company.
Despite General Motors Chair and CEO Mary Barra's statement a month ago that the company would not be implementing any job cuts in the near future, a notable reduction in the workforce has now occurred. During an earnings call, Barra announced plans to reduce costs and save $2 billion over the next two years by reducing complexity in all four products and cutting corporate overhead expenses. However, Barra had also previously assured that the company had no plans for layoffs.
“The areas we're focusing on include continuing to reduce complexity in all of our products and reducing corporate overhead expenses across the board. I do want to be clear, though. We're not planning layoffs. We are limiting our hiring to only the most strategically important roles and will use attrition to help manage overall headcount," she said at the time, according to the same report by Mint.
The company stated via email that the recent job cuts were made due to its performance and will aid in cost reduction efforts. In a similar move, Ford Motors, a competitor of GM, has announced plans to terminate 3,800 positions in Europe over the next three years as part of its restructuring program aimed at improving its cost structure.