Most of the engineers will end up with other positions at GM according to Kevin Kelly, a spokesman for the automaker who said the move will “require a small number of engineers to move to other parts of the organization over the next several months.”
Kelly also remarked that GM is “taking steps to rebalance our engineering resources to better align with our growth strategy.” The Winning with Simplicity strategy calls for GM to eliminate approximately 50 percent of its vehicle trim levels according to Barra’s statements during the Q2 2023 earnings call.
Barra added that GM is aiming for “fewer part numbers to simplify marketing, engineering, manufacturing, while maintaining the best features customers want.” GM has not revealed exactly where the 200 engineering jobs will be cut.
GM now wants to reduce costs by $3 billion rather than its previous target of $2 billion, highlighting why the engineering jobs are on the chopping block. As part of this plan, it previously eliminated other jobs, though at the time it said “a relatively small number of salaried employees and executives” were involved. Most of the eliminated jobs were in the U.S.
The automaker announced a voluntary separation program or VSP in March. This program offered one month of pay per year of service, capped at a maximum of 12 months of pay, along with a pro-rated team GM performance bonus and a few other benefits for salaried employees who had worked for The General for five years or longer. It also offered executives with two years of service their base salary plus several incentives and bonuses.
In the event, about 5,000 white collar employees took the VSP, costing GM a total of about $1 billion. The number met GM expectations and was probably enough to prevent future layoffs according to company representatives.
Less engineering jobs are needed as well, with Mary Barra highlighting the goal of GM to “reduce design and engineering expense, supplier costs, order complexity, buildable combinations and manufacturing complexity.”
Per her statements, the company will focus on “smart bundling of customer features and options” as the strategy advances.