GM Slashes Hundreds of Jobs at Tech Centers to Cut Costs

·2 min read
DETROIT, MI - JUNE 12: The General Motors World Headquarters is shown June 12, 2018 in Detroit, Michigan.
DETROIT, MI - JUNE 12: The General Motors World Headquarters is shown June 12, 2018 in Detroit, Michigan.

General Motors is reportedly cutting “several hundred” contract employees at its Global Technical Center in Warren, Michigan and other locations, according to the Detroit Free Press. For the most part, these jobs were full-time, and the move is said to have been done in an effort to get $2 billion off the automaker’s budget by the end of 2025.

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The latest round of layoffs comes about a month after 5,000 salaried GM employees agreed to voluntarily leave the company, and about two months after it laid off around 500 executive-level and salaried jobs. The former reportedly would help GM achieve close to half of its cost-cutting for 2023 alone, and it would prevent further involuntary cuts. Well, turns out that isn’t what happened.

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According to Maria Raynal, a GM spokesperson who talked to Freep, the employees were spread out across the organization.

“They’re in the global product development area in all different areas. It can be multiple different positions,” Raynal told the Detroit Free Press. It’s part of normal operations and it contributes to that saving, but we’re not sharing a specific number.”

Killing contract worker jobs isn’t really anything new for large corporations like GM that are looking to save a little extra dough, since they’re in a rather weird position in terms of employment.

“Contract workers are in an in-between land where they are not employees of the company, don’t get company benefits, and can’t count on long-term work. When contractors are let go, companies don’t think of it in terms of forcing them. They think of it as just not renewing work that always was temporary,” Erike Gordon, a professor at the University of Michigan’s Ross School of Business told the outlet. “It’s a strained but common interpretation of ‘forced cuts’ or ‘job loss.’”

Another business professor at Wayne State told Freep that it’s likely more jobs will be cut at GM as the company spends a whole lot of cash to fund its transition to electric vehicles. It’s something to absolutely keep an eye on since the automaker is set to begin negotiating a new contract with the UAW for its hourly workers over the summer.

“GM, like its other Detroit 3 competitors, struggles continually to realign its cost structure to shift from internal combustion to electrification. This will require cuts in the salaried and hourly workforces, the contracted workforce, and the disposing of obsolete production assets as result of the shift, Marick Master of Wayne State told Freep. “This is not a stationary but rather a moving target, and these kinds of adjustments can be expected as a pace of transition accelerates.”

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