GM layoffs: Auto major to cut 1,700 jobs, 5,500 employees to be laid off temporarily—who's affected?

GM layoffs: General Motors (GM) announced on Wednesday plans to cut US electric vehicle and battery production. It will lay off 1,200 workers at its Detroit EV plant and 550 at a battery plant in Ohio, as a response to a slowdown in battery car demand, Reuters reported.

In January, the automaker said it would pause battery cell production at two US joint-venture battery plants in Tennessee and Ohio for nearly six months.

Meanwhile, GM will temporarily lay off 5,500 employees across three plants. This includes 3,400 workers furloughed at its Factory Zero plant in Detroit, where the electric Chevrolet Silverado, GMC Sierra, and Hummer EVs are produced. The company stated on Wednesday that it will evaluate the required level of production and reinstate approximately 2,200 of those employees in January when the plant resumes operations on a single shift. The remaining 1,200 will be furloughed indefinitely, Bloomberg reported.

The layoffs come as several companies announce job cuts. E-commerce giant Amazon recently confirmed it will slash 14,000 jobs across departments amid its push for artificial intelligence (AI).

From January, GM will reduce production at its Detroit EV plant to one shift, down from the current two, following previous layoffs at the facility. This change will decrease output by roughly 50%. The plant manufactures three large electric pickup trucks, including the Chevrolet Silverado and GMC Sierra, along with the EV Escalade IQ and Hummer SUV.

Why is GM cutting jobs?

General Motors said the production and job cuts were “in response to slower near-term EV adoption and an evolving regulatory environment.” Last month, it lobbied Congress and the White House to ease emissions requirements, the report said.

US automakers are significantly reducing their EV plans, expecting a rapid decline in consumer demand once the $7,500 federal tax credit for EV buyers expires. Experts say that EV sales could potentially drop by 50% in the upcoming months after surpassing 10% of total US car sales this summer, the report said.

Nissan, Jeep-maker Stellantis, and other automakers have halted plans for upcoming electric models. Earlier in October, GM announced it was cancelling the production of its Brightdrop electric van, citing slow progress in the commercial EV van market.

GM has revised its outlook for EV sales downward and implemented additional EV production cuts this year.

United Auto Workers Union President Shawn Fain criticised GM for the job cuts, highlighting that the company increased its expected annual profits to $13 billion this month.

"The UAW will continue to fight for more investment in both (internal combustion engine) and EV production at GM and beyond," the report quoted Fain.

The company said it cut around 500 white-collar jobs in the last week. In 2021, GM announced plans to shift to all EV sales by 2035 and increased investment, but it has since scaled back its efforts amid dwindling demand.

Last week, GM CEO Mary Barra said, "With an evolving regulatory framework and the end of the federal consumer incentives, it's clear that near-term EV adoption will be much lower than planned."

She also hoped that the automaker would reduce EV losses from 2026 onwards.