General Motors Layoffs 2023: What to Know About the Latest GM Job Cuts
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One of Motor City’s most recognizable names joins the growing list of companies laying off workers. General Motors (NYSE:GM) had previously tried to sustain the job cuts. When Q4 2022 results were reported on Jan. 31, CEO Mary Barra stated, “I want to be clear that we are not planning any layoffs.”
A good month later, however, the car giant announced that it would be cutting around 500 employees, especially at management level. GM stock isn’t reacting badly to this news. It’s actually green today, but that doesn’t mean investors shouldn’t be thinking about General Motors’ layoffs and what they could mean for the company’s future.
A closer look at General Motors layoffs
It’s been a complicated month for GM shares, which have been trending lower for the past two weeks. It saw some growth in early February after announcing a partnership with a chipmaker GlobalFoundries (NASDAQ:GFS), but momentum has since waned.
Now, General Motors’ layoffs are looming and could add further uncertainty to investors, making it harder for the stock to recover in the near term. Per The Detroit News:
“The move, carried out amid impressive profitability, signals the evolving impact of electrification on legacy automakers like GM. The company does not disclose the exact number of affected employees in the US and overseas locations: As of December 2022, GM had approximately 86,000 hourly workers and 81,000 salaried employees worldwide.
However, these numbers should help put the news in context. Losing 500 jobs out of 81,000 is a very small percentage. But even more important is the fact that GM is in a transition phase. The Company has a strong focus on transitioning its resources and operations to electric vehicle (EV) production.
Wedbush analyst Daniel Ives recently stated that “cost cutting is part of this process,” suggesting investors shouldn’t worry. In addition to its EV push, General Motors is also hard at work developing its own EV battery platform, another likely catalyst for growth moving forward. GM shares are likely to shrug off the impact of the layoffs and continue to grow as the market recovers.
At the time of publication, Samuel O’Brien held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Posting Policies.