GM To Eliminate 200 Engineers, Third Job-Cutting Move This Year

General Motors is cutting jobs in order to reduce costs. The positions of 200 engineers working for the company are at risk. It is not the first time in 2023 that GM has made such an announcement.
Mary Barra has announced a new job-cutting move at GM 7 photos
Photo: General Motors
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It all comes down to the fact that GM is targeting a $2 billion cost reduction over the upcoming two years, in an attempt to – as they say – "rebalance our engineering resources to better align with our growth strategy."

To reach the target, the company has to eliminate approximately 200 more engineering positions, saying that it is a "small number." And this time, it is. They are also planning to progressively reduce the budget for the sales and marketing divisions by $800 million.

The executives have already announced the employees that they will have the opportunity to transition into other positions within the company.

The move is part of what General Motos calls "winning with simplicity," a strategy the organzation announced during the second-quarter earnings call. It is a move that will simplify design, lineup, and manufacturing complexity in the next several months, according to GM’s plan.

GM’s CEO Mary Barra revealed a 50% reduction in trim levels for both ICE-powered and electric models. This will also lead to a reduction of the number of parts involved in manufacturing and will expand the use of shared systems between models.

It means that customers will have fewer equipment options to choose from, since the carkmaker is going to ditch trim levels, depending on their popularity among customers. They will instead invest in marketing, engineering, and manufacturing efficiency. The plan has no connection whatsoever with the United Auto Workers (UAW) labor contract talks.

It is not the first time this year that GM has made an announcement with reference to job cutting within the organization. 81,000 were working for GM then, with the numbers continuing to be reduced. Back in May, the company announced it had already cut several hundred full-time contract workers, with the engineering hub in suburban Detroit and the company’s Warren Tech Center included.

A month prior to the announcement, General Motors representatives stated that around 5,000 salaried workers had opted for buyouts to leave the company. A previous similar move happened in February, with the company cutting hundreds of executive-level and salaried jobs.

Back then, Mary Barra said in a memo to employees that the decision provided aproximately $1 billion towards the $2 billion target. Which means that, at least in theory, GM was half way there in February already. The move is probably not going according to plan and they have to keep restructuring the organization.

The brand will be switching to a completely electric lineup by 2035 and also needs to steer investments into that direction, which partially explains this year's massive job-cutting.
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