General Motors, the American automobile brand, is cutting over 1,000 jobs worldwide in its software and services division as part of a move to streamline operations. This includes about 600 positions being eliminated at GM's tech campus near Detroit, Michigan.
The layoffs come less than six months after leadership changes in the division. This includes the departure of former Apple executive Mike Abbott in March, as per a report by CNBC. The cuts will roughly impact nearly 1.3 per cent of GM’s global workforce of 76,000.
“As we build GM’s future, we must simplify for speed and excellence, make bold choices, and prioritize the investments that will have the greatest impact,” a company spokesperson reportedly said.
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“As a result, we’re reducing certain teams within the Software and Services organization. We are grateful to those who helped establish a strong foundation that positions GM to lead moving forward,” the spokesperson added.
However, the shares of GM Motors have delivered robust returns on year-to-date basis. On the New York Stock Exchange (NYSE), the automobile company has given returns of more than 25 per cent since the advent of this year.
Why are companies announcing layoffs?
Recently, many companies have announced massive layoffs globally in order to reduce costs and streamline operations. The job cuts have impacted almost every industry, be it media or retail.
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The recent announcement by GM Motors reflects a broader trend in the automobile industry itself amidst concerns around a potential industry downturn. Companies like Tesla, Lucid Motors and Ford have already implemented downsizing earlier this year.
Auto companies are making these cuts as the larger industry is now facing a slowdown, even as they invest billions in emerging areas such as all-electric vehicles and software-defined vehicles.
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