General Motors Co. is laying off more than 1,000 salaried employees in its software and services organization globally — including more than 600 employees working at its Global Technical Center in Warren — in an effort to streamline the division’s operations under new leadership.
This comes as GM has been rethinking its software strategy after struggling with issues since launching several new EVs. Most recently, the automaker recalled more than 20,000 electric Cadillac Lyriq all-wheel drive SUVs for a software glitch that could cause the anti-lock braking system to falsely activate, increasing the risk of a crash.
Earlier this year, GM placed a stop-sale order on the electric Chevrolet Blazer because of a software problem. The Lyriq and GMC Hummer EV have had other software issues that required recalls, marring highly anticipated launches.
In a statement Monday, GM spokesperson Kevin Kelly said as the company builds its future, it “must simplify for speed and excellence, make bold choices and prioritize the investments that will have the greatest impact. 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 declined to confirm how many employees staff its software and services teams in the United States or worldwide. The layoffs signal the Detroit automaker’s intensifying focus on the software embedded in new vehicles and come after GM executives in June put Apple Inc. veterans Baris Cetinok and Dave Richardson in charge of the organization. Armed with years of Silicon Valley tech experience, both joined GM in September 2023.
Cetinok and Richardson took over GM’s software organization after former leader Mike Abbott left GM in March 2024 due to health reasons. Cetinok and Richardson work out of GM’s new Mountain View Technical Center in California.
More: GM issues Cadillac Lyriq recall for software issue affecting braking system
Cetinok has more than 25 years of experience in product, engineering and design at companies including Apple, Amazon.com Inc. and Microsoft Corp. Richardson worked at Apple for 12 years as an engineering leader responsible for driving innovation and efficiency in infrastructure for services including iCloud, FaceTime and Siri.
More: Chevy ends stop sale on Blazer EV, lowers pricing on the SUV
GM isn’t alone in having software problems. Rivals Volvo Cars, Volkswagen AG and Tesla Inc. all have been there, underscoring just how vital properly operating software can be for customers accustomed to using technology that is reliable.
“A big part of the challenge legacy automotive companies, both automakers and suppliers, have faced has to do with their organizations and their processes that were not really set up for modern automotive software development,” said Sam Abuelsamid, principal e-mobility analyst at market research firm Guidehouse Inc.
“They’ve been doing software for decades, but the nature of software development has fundamentally changed in recent years, and developing modern software-defined vehicles is a much more complex process than it has been in the past.”
In total, 634 employees at GM’s Technical Center in Warren received layoff notices, according to GM’s Worker Adjustment and Retraining Notification or WARN filing. The employees no longer reported to work beginning the week of Aug. 19 but will continue to be employed until Sept. 3 and “will receive a payment equivalent to their wages and benefits as if they were employed” through Oct. 18, the filing states.
Warren Mayor Lori Stone could not be reached for comment through the city’s communications department on Monday. But a spokesperson for the Michigan Economic Development Corp., Otie McKinley, said the agency “will continue to work closely with General Motors to ensure the company’s future in Michigan is strong and to collaborate around connecting those impacted by today’s announcement.”
Outside of the Warren operation, where GM employs more than 20,000, affected employees also work in California, Austin, Texas, Canada and elsewhere.
Dan Ives, analyst at Wedbush Securities Inc., said GM executives are trying to get their “arms around an evolving demand and cost structure. Wall Street doesn’t want uncertainty and they’d rather GM cut proactively where they can without strategically changing the business. GM’s navigated headwinds much better than Ford and Stellantis, but they need to stay nimble in terms of the broader EV strategy, which continues to be in flux.”
GM and other automakers are trying to reduce costs while spending billions on new EV launches and keeping their internal combustion engine lineups fresh. Last year, GM CFO Paul Jacobson said in April about 5,000 salaried workers took buyout offers announced earlier in 2023.
The automaker is on track to achieve $2 billion of net fixed cost savings by the end of this year, Jacobson said on GM’s second-quarter earnings call in July. That’s when GM reported record revenue in the quarter of $47.9 billion and net income of $2.9 billion.
Crosstown rival Stellantis NV is also working on cost-cutting with buyout offers to salaried employees. Stellantis has not said which functions would be targeted for reductions or how many of its 11,000 U.S. salaried employees would receive buy-out offers. The buyouts came after the maker of Chrysler, Dodge, Jeep and Ram reported earning $6.1 billion, down 48% for the first six months, on net revenues of $92.2 billion, which was off 14% compared to a year earlier.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
