General Motors cuts 1,000 jobs as focus shifts to electric vehicle growth
General Motors (GM), an American automaker, has announced plans to lay off around 1,000 employees worldwide, primarily in office positions. The company is grappling with challenges related to the shift towards electric vehicles and increasing competition in the global automotive market.
According to the latest report from the Associated Press, the decision to lay off employees was announced on Friday at 5:00 p.m. GMT. Representatives of General Motors explain that the company needs to "optimise operations for speed and excellence." In an official statement, the corporation emphasises enhancing operational efficiency and concentrating on key priorities.
Data referenced by the Associated Press indicates that during the first three quarters of 2024, new electric vehicle sales in the U.S. increased by 7.2%, reaching approximately 936,000 units. This growth is significantly slower compared to 2023, which saw a 47% surge. Nevertheless, analysts anticipate that total sales for this year will probably exceed last year's record of 1.19 million vehicles.
Cost cutting a priority
The Associated Press reminds us that General Motors employs approximately 150,000 workers worldwide. Most employees work at the technical centre in Warren, in the suburbs of Detroit. At the end of last year, the company employed 76,000 office workers.
According to the agency, CFO Paul Jacobson confirmed last month that "the company is on track to achieve its goal of reducing fixed costs by $2 billion by the end of this year." In April of the previous year, about 5,000 General Motors office employees opted for the voluntary departure programme.
Challenges of the energy transition
The Associated Press points out that, like other automakers, GM is navigating the challenging transition process to electromobility. This involves balancing the development and updates of combustion engine models while also channelling resources into battery and assembly plant investments and securing raw materials and components needed for the upcoming generation of electric vehicles.
According to the agency's data, the share of electric vehicles in new vehicle sales in the US this year increased to 7.9%, compared to 7.6% last year. General Motors does not rule out further workforce changes in the future, although currently, as the Associated Press reports, "layoffs are not being considered."
