GM Restructures Design Engineering Team, Lays Off Hundreds

General Motors (GM) is undergoing a significant organizational change by restructuring its design engineering team, resulting in the layoffs of hundreds of employees. This decision primarily impacts the tech center located in Warren, Michigan. A GM spokesperson confirmed that the job cuts were in the “low hundreds” and that affected employees were notified on Friday morning.

Reasons Behind GM’s Restructuring

The restructuring aims to enhance GM’s core architectural design engineering capabilities. As part of this initiative, numerous CAD execution roles have been eliminated. GM expressed gratitude for the contributions of the impacted staff members.

Financial Context

Three days prior to these layoffs, GM reported impressive third-quarter earnings. The announcement led to a stock surge of 15%, marking the company’s most significant single-day gain since 2020. This positive financial performance allowed GM to raise its profit outlook.

• Profit improvement attributed to reduced tariff pressures
• Decreased losses from electric vehicles (EVs)
• Past tariff impacts reportedly cost GM $1.1 billion

Additionally, GM disclosed that it would incur $1.6 billion in charges related to its revised EV strategy, highlighting the company’s ongoing challenges in the rapidly evolving automotive market.

Industry-Wide Layoffs

GM is not alone in facing workforce reductions; other automakers are also making cuts. Rivian, a notable electric vehicle manufacturer, recently announced plans to lay off 600 employees, which represents 4.5% of its workforce. This decision came in response to the expiration of a $7,500 EV tax credit in the United States.

Rivian CEO RJ Scaringe articulated that the changes were necessary given the shifting operational landscape. He noted the need to recalibrate the company’s market strategies.

The automotive industry is currently navigating various challenges, including tariffs and the strategic pivot toward electric vehicles, leading to a wave of layoffs across several manufacturers.