• by Tanya Gazdik , August 21, 2024

General Motors is cutting over 1,000 salaried software and service employees.

“Today’s vehicles have become as much computers on wheels as they are mechanical modes of transportation,” according to Headlight News. “That’s why General Motors has taken some industry observers by surprise with news that it is cutting an estimated 1,000 or more jobs in its software and services division. The move comes at a time when many manufacturers are aggressively hiring tech employees.”

The moves come despite the automaker’s focus on opportunities to expand revenues through the use of connected and autonomous vehicle technologies. GM CEO Mary Barra has said the automaker expects to earn billions from software and related services.

“What might seem a pullback more likely just signals investment focused on outsourcing as opposed to payrolled workers,” according to CIO. “Meaningful analysis is difficult because GM’s internal and external comments are cryptic about the reasons for the layoffs. Various industry observers said the move almost certainly reflects a decision to outsource those software efforts to technology partners. But GM itself said only that these software efforts were a lower priority than unidentified other business needs.”

The cuts represent about 1.3% of the company’s global salaried workforce of 76,000 as of the end of last year.

“The layoffs, including roughly 600 jobs at GM’s tech campus near Detroit, come less than six months after leadership changes overseeing the operations, including former Apple executive Mike Abbott leaving the automaker after less than a year in March due to health reasons,” according to CNBC.  “The software and services division covers a wide variety of areas for the automaker, including infotainment, its OnStar brand, and emerging areas such as subscriptions and other vehicle features and development.”

Touchscreens, infotainment systems, and active safety systems have become main selling points for buyers wanting the latest and greatest technology in their vehicles. 

"And companies like GM have spent billions in an attempt to monetize it through things like subscription services,” according to Motor1. “GM made the controversial decision to drop Apple CarPlay and Android Auto from its electric vehicles, instead offering in-house software developed in collaboration with Google to reduce distractions and provide a better user experience, according to the brand. This type of integration also makes it easier to sell subscription-based services, creating more revenue opportunities.”