Why did General Motors cut 1,000 jobs in software and services?

General Motors (GM), the American automotive manufacturer, is laying off 1,000 employees from its software and service units worldwide, reported Reuters on Monday, August 20.

“As we build GM’s future, we must simplify for speed and excellence, make bold choices, and prioritize the investments that will have the greatest impact,” the automaker stated in an official statement quoted in the report. CNBC reported the news first.

The news agency reported that nearly 600 employees were affected at General Motors' tech campus near Detroit, Michigan, United States. This was close to half of the cuts in the US.

The job cuts were not because of the cost cuts but were fuelled by the review of operations point of view after Mike Abbott, the executive vice president of software and services, quit General Motors in March citing health reasons, said the company, as per the news report.

Mike Abbott was a former Apple executive who joined General Motors in 2023 to lead the company's software development efforts in between an investment hike from the brand in its electric vehicle segment and its subscription services.

General Motors stated that in April 2023, nearly 5,000 of its salaried workers took buyouts from the company to leave the organisation as it worked to hit the target of a $2 billion cost cut. This happened after the company reduced hundreds of executive-level and salaried-level jobs in February 2023, as per the report.

The layoffs represent nearly 1.3 per cent of the company's global workforce. The latest number shows that the company has close to 76,000 employees as of the end of 2023. This includes 53,000 employees in the US, as per the report. As per General Motors' website, it has 95,000 employees and 156 facilities in the US.