GM Is Cutting Back Even More

GM Is Cutting Back Even More  
GM Is Cutting Back Even More

What does this mean for the future of General Motors?

In a move that’s surprising to some, General Motors is cutting costs yet again and quite dramatically, including laying off some employees. This comes after GM reduced its workforce earlier this year by offering voluntary separation severance packages earlier this year after it laid off 500 executives in February.

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This time around, GM says it’s laying off and reallocating about 200 engineers in the company, plus it announced the closure of its Arizona IT Innovation Center in Chandler, says AZ Family. The automaker hasn’t disclosed just how many people are losing their jobs in Arizona.


At this point it wouldn’t be a surprise if more layoffs and realignments are coming for GM employees in the near future. With interest rates increasing, many consumers feeling the pinch of inflation, and layoffs at other companies rippling through the country, some industry analysts predict new car sales will fall off soon.

Thanks to pent-up demand with shortages during the pandemic new vehicle sales remain strong for now, but it seems GM and others are bracing for what’s coming down the line.

GM is proudly touting its “winning with simplicity” strategy for reducing costs for design, engineering, manufacturing, and more. As The Detroit News reports, CEO Mary Barra says the automaker is looking to slash trim levels for EVs and ICE models by 50% to also keep costs low.

This all comes after the voluntary separation plan resulted in 5,000 employees leaving the company, helping with a $1 billion cost reduction plan. Barra says another $800 million has been cut from sales and marketing, with more spending slashes coming.

Of course, GM management is putting a positive spin on these moves. They must save face not only to the public in general but also to investors. But it’s possible these spending reductions are in preparation for tough economic times ahead, plus increased competition from foreign automakers in North America.

What’s more, GM depended heavily on the Chinese market, but political and cultural forces in the communist country are promoting domestic automakers over foreign brands.

In other words, GM could be suffering a thousand cuts, requiring it to roll back spending in an effort to keep the ship upright. Hopefully the automaker doesn’t come to Congress yet again asking for a bailout, whatever happens next.

Images via GM