Automotive

GM fires 1,000 software engineers. 'Bold choices needed'

Reorganisation in order not to lose competitiveness. The US manufacturer was recently criticised for replacing Apple CarPlay with a proprietary system.

19 August 2024

3' min read

General Motors has initiated the layoff of more than 1,000 software engineers as part of a process to streamline its software and services organisation, according to an unofficial source. More than 600 layoffs will take place in the Michigan offices. These decisions follow by two months the promotion of two former Apple employees, David Richardson and Baris Cetinok, to senior vice-presidents of the group and co-leaders of the division focused on connected vehicles, infotainment and advanced driver assistance systems.

"We have to make bold choices and prioritise the investments that will have the greatest impact," said the Detroit-based company, confirming the cuts, but without specifying the exact number of people affected. GM declined to indicate how much these reductions will affect the overall number of software engineers. The news comes a week after GM announced a restructuring and capacity reduction in China.

GM is committed to developing in-vehicle software that increasingly manages essential vehicle systems, from battery management to driving functionality and on-board content display, particularly in the company's latest electric models. In recent years, the company has accelerated hiring in software development as part of its push towards electrification, self-driving cars and software-related services. GM hopes that new services at charging stations, digital content and other businesses other than strictly automotive will one day generate billions in revenue.

A path not without obstacles, the transition. With problems, for example, for the Chevrolet Blazer electric SUV and the electric Cadillac Lyriq, some of which were linked precisely to software defects. Stumbling blocks common to those encountered by other players, such as Volkswagen with its software unit, Cariad, which has slowed down the development of crucial models such as the electric Porsche Macan.

In the case of the Blazer, GM had to face negative consumer reactions, with accompanying heated controversy, for replacing Apple's CarPlay infotainment system with the proprietary system.

In any case, the announced redundancies do not necessarily indicate a reduction in the importance of software for GM, but may reflect a strategy of reorganisation and optimisation of resources to better meet future challenges and maintain competitiveness in the evolving automotive sector.

GM may be engaged in a reorganisation of its workforce to optimise resources and improve efficiency. This could include concentrating on specific software development areas and cutting positions that are no longer deemed necessary or can be outsourced.

Another possible reason is the need to reduce costs. GM, like many other automotive companies, may find itself under pressure to remain competitive in an industry that requires massive investment in new technologies such as electric and autonomous vehicles. Cutting staff may be a measure to contain operating costs and reinvest resources in other strategic areas.

But it is also possible that the Detroit-based company is investing in automation technologies that reduce the need for large numbers of software engineers. GM may also want to redirect its efforts towards specific areas of software development that are considered more critical for the future. This could involve reducing activities in less priority areas and reallocating resources.

The share price was not particularly affected by the redundancy news, remaining in the positive area, just under one per cent. Balance since the beginning of the year, +27 per cent.

Alberto Annicchiaricovicecaposervizio
Luogo: Milano
Lingue parlate: inglese (C1), buona comprensione di francese e spagnolo
Argomenti: economia, auto, tech, social media, seo, blogging, viaggi, food
Scheda autore
Trust project