General Motors (GM) is cutting down jobs in its software department in a bid to keep ballooning operational costs under control and explore AI opportunities. The changes are said to affect over 1,000 salaried workers at the company, 600 of whom come from its famed Detroit Tech Campus.
Reports say the company is exploring possibly replacing some human talent with artificial intelligence. Its plant in Spring Hill, an 11-million-square-foot facility in Tennessee seems unaffected by the latest round of job cuts.
Investors cheer General Motors
When the news of the lay-off became public, the company’s shares gained 0.97% in value , which appears to be a positive response to the move.
A GM spokesperson, quoted by CNBC, described the decision as a bold choice taken in the interests of continuity.
“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,” the spokesperson said.
GM is one of the world’s largest employers, with a staff complement of about 76,000 workers.
“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.”
GM spokesperson.
GM had recruited expansively in the ‘software and services department’ with the aim of becoming a trusted provider of automotive software and programs.
GM joins the bandwagon of job cuts
In the past year, GM has been trying to generate revenue through subscriptions to several of its software and programs, including its flagship OnStar, which provides security and navigation features.
The drive was being led by former Apple Cloud Executive Mike Abbott, who joined the company in May 2023 but left the job in under a year, citing health reasons.
His appointment was meant to lead the company’s enhanced focus on software-led vehicles and electric vehicles. However, the process has brought in high costs, which reportedly have necessitated the reduction of the staff headcount.
GM is not the only tech-related company to lay off workers in 2024; TikTok, Microsoft, Google, and Amazon have all followed this path.
The electric car industry has not picked up at the pace that was predicted; while there has been a shift to EVs and software-driven vehicles, the uptake has not yet matched the investment that major players like GM are making.
