By cutting and reallocating around 200 engineering employees, General Motors is moving forward with a new strategy that promises to simplify and lower the cost of its operations.
The corporation has informed engineers working in unidentified departments that their roles have been removed and is providing them with alternative options. The decision is a component of GM’s new “Winning with simplicity” strategy, which CEO Mary Barra unveiled at the company’s second-quarter earnings.
GM’s product teams are implementing the plan to “reduce design and engineering expense, supplier cost, order complexity, buildable combinations, and manufacturing complexity,” Barra told investors. She added that EVs and products with internal combustion engines will reduce trim levels by 50%.
GM spokesperson Kevin Kelly said, “GM is rebalancing our engineering resources to better align with our growth strategy. Over the next months, this will need a small number of engineers moving to different departments inside the company. We will assist those impacted and allow them to apply for available employment.”
GM originally planned to reduce expenses by $2 billion, but now it wants to do so by $3 billion by 2024. To do this, it plans to reduce the size of its paid personnel, simplify vehicles, reduce spending on sales and marketing, and cut back on administrative and travel expenses.
Earlier this year, GM granted approximately 5,000 buyout applications and offered most of its salaried workers a buyout program. This enabled the manufacturer to save nearly $1 billion in costs. According to CFO Paul Jacobson, the additional $1 billion in cost savings that GM aims for “Doesn’t contemplate any additional reductions beyond what I would consider normal attrition.”