GM Bets on AI: 600 Layoffs and a Strategic Shift

Massive Layoffs at General Motors

General Motors recently announced the layoff of 500 to 600 employees from its IT division, primarily affecting the sites in Austin, Texas, and Warren, Michigan. This decision represents about 10% of its overall IT workforce, estimated at 6,000 people. The layoffs were communicated during fifteen-minute virtual meetings, where employees were informed by a member of the human resources team.

Kevin Kelly, a GM spokesperson, described this initiative as a "transformation" aimed at preparing the company for the future. While AI influenced this decision, it is not the sole factor. GM's stock fell by 4% on Wall Street on the day of the announcement, highlighting the immediate impact of this restructuring on investor perception.

Recruitment of AI Experts

In parallel, GM is actively recruiting engineers specialized in artificial intelligence, data, and conversational agents. The company is particularly looking for AI agent developers, prompt engineering specialists, as well as data engineers and cloud architects. Seventy positions remain open for recruitment, all focused on AI, autonomous vehicles, or motorsport.

Among the new hires, Behrad Toghi, a former Apple employee, leads the AI Robotics team, while Rashed Haq, former head of AI at Cruise, holds the vice presidency of autonomous vehicles. Sterling Anderson, co-founder of Aurora, oversees the merger of the group's software operations. Three senior software executives left the company in November 2025 during this consolidation, including Baris Cetinok, Dave Richardson, and Barak Turovsky, the latter having served as AI director for only nine months before his departure.

Financial Performance and Strategy

Despite these layoffs, GM's financial performance remains strong. In the first quarter of 2026, the company generated $43.6 billion in revenue, with an adjusted EBIT of $4.3 billion, up 22%. The net profit stands at $2.6 billion, exceeding Wall Street expectations. Nearly 90% of GM's autonomous driving software code now comes from AI models, illustrating the technological shift the company has undertaken.

However, GM also recorded $1.1 billion in exceptional charges related to its refocus on electric vehicles, temporarily suspending certain programs such as the Chevrolet Silverado EV, GMC Hummer EV, and Cadillac Escalade IQ. Cruise, which was acquired and then shut down at the end of 2024, shifted its technical teams towards passenger vehicles.

Severance Packages and Impact on H-1B Visas

Laid-off employees will receive severance packages varying based on their tenure, ranging from two months' salary for one to four years of service, to six months for twelve years or more. An additional health package, ranging from $2,000 to $6,000, is also planned. The 60-day period for H-1B visa holders begins from the effective date of the layoff, not from the notification.

Repercussions and Outlook

Mary Barra, GM's CEO, had stated that the company would go "where the talent is." However, Sam Abuelsamid from Telemetry Agency expresses reservations about the effectiveness of this strategy. In 2025, GM had already eliminated over 200 CAD engineer positions due to "economic conditions." Patrick Anderson, CEO of Anderson Economic Group, views these moves as a "warning signal" for other employers in Michigan.