General Motors trims workforce as electric vehicle sales slow growth
General Motors (GM), an American automaker, has announced plans to lay off around a thousand employees worldwide, primarily in office positions. The company faces challenges related to the transition towards electric vehicles and escalating competition in the global automotive market.
According to the latest report from the Associated Press, the decision to lay off employees was announced on Friday at 5:00 PM ET. Representatives of General Motors explained that the company needs to "optimize operations for speed and excellence." In an official statement, the corporation emphasizes the necessity of increasing operational efficiency and focusing on key priorities.
Data referenced by the Associated Press shows that U.S. electric vehicle sales rose 7.2% in the first three quarters of 2024, reaching approximately 936,000 units. This growth rate is notably slower than in 2023, when sales increased by 47%. Nonetheless, analysts in the report anticipate that sales for this year are likely to exceed last year’s record of 1.19 million vehicles.
Cost cutting a priority
The Associated Press notes that General Motors employs about 150,000 workers worldwide. Most employees work at the technical centre in Warren, a suburb of Detroit. At the end of last year, the company employed 76,000 office workers.
According to the agency, CFO Paul Jacobson confirmed last month that the company is on track to reduce fixed costs by CAD 2.8 billion by the end of this year. In April of last year, about 5,000 General Motors office employees took advantage of a voluntary departure program.
Challenges of the energy transition
According to the Associated Press, GM, like other automakers, is dealing with the challenge of navigating the shift to electric vehicles. The company needs to continue developing and upgrading combustion engine models while allocating resources to battery production, assembly facilities, and essential materials and components for the future generation of electric vehicles.
According to the agency's data, the share of electric vehicles in new vehicle sales in the US this year increased to 7.9%, compared to 7.6% last year. General Motors does not rule out further workforce changes in the future, although currently, as AP reports, "layoffs are not being considered."
