Shares of General Motors (GM) fell in today’s trading after the automaker announced plans to cut about 500 to 600 salaried employees from its information technology department as it looks to lower costs and reshape the team. According to Bloomberg, managers started notifying affected workers on Monday morning. GM confirmed that some jobs are being eliminated and said that the cuts are part of a plan to modernize its IT department and prepare the company for the future.
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The layoffs will affect GM offices around the world and come at a time when the automaker is trying to protect profits. Indeed, U.S. sales have been weak to start the year. This also follows earlier cost reductions that included hundreds of salaried job cuts in October and thousands of blue-collar layoffs linked to weaker demand for electric vehicles.
At the same time, GM is trying to make its business more technology-focused. The company wants to add more software, computing, and artificial intelligence capabilities to its vehicles and internal operations. Because of that, the cuts appear to be partly about making room for employees with newer tech skills, not just reducing headcount. Still, GM faces inflationary pressure tied to the war in Iran and continues to scale back parts of its EV business, where it has already taken $8.7 billion in writedowns.
Is GM Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 14 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average GM price target of $96.29 per share implies 27.6% upside potential.
