News that General Motors plans to cut up to 14,800 jobs in the U.S. and Canada was initially reported as a conventional business-cycle adjustment — a “trimming of the sails.” The main causes of the cuts were understood to be slowing demand in the U.S. and China, slumping demand for sedans, and the need to reduce over-capacity in North America.
What GM’s Layoffs Reveal About the Digitalization of the Auto Industry
The most revealing aspect of GM’s plant closings and layoffs may well be what they say about broader technology trends. GM’s layoffs are about accelerating the staffing changes mandated by the company’s aggressive transition from analog to digital products and from gasoline to electric power. As such, the new layoffs (and associated future hirings) are likely an augury of much more disruption coming—in the auto sector, for sure, but also in firms all across the economy. Central to GM’s announcement is the “digitalization of everything.” GM’s layoffs significantly reflect the talent and workforce strains associated with the diffusion of digital and electronic technologies into nearly every industry, business, and workplace in America. Specifically, the advent of consumer electronics, IT, electric and battery powered drivetrains, and—soon—autonomy in the automotive industry are placing excruciating new demands on its workforce, and forcing painful change.