General Motors Is Replacing Legacy IT Workers With AI Engineers In Major Restructuring

General Motors is laying off 500 to 600 salaried IT workers and replacing them with engineers who know how to build AI systems. The cuts, centered in Austin, Texas, and Warren, Michigan, represent more than 10 percent of GM's IT department. The company is not reducing headcount for cost savings. It is executing a skills swap that reflects the automaker's shift toward software-defined vehicles.

GM Shares Fall Four Percent After Announcement

GM shares fell four percent after the announcement. The restructuring is narrow. It targets one department in a company that employs roughly 163,000 people. But its significance extends beyond the numbers because it illustrates what enterprise AI adoption looks like in practice at a 118-year-old industrial company.

The Strategy Targets Electric Vehicle And Autonomous Driving Retreats

GM bet on three technology futures. It is now retreating from electric vehicles and autonomous driving and doubling down on software-defined vehicles. The electric vehicle pullback has been severe. GM recorded 7.1 billion dollars in special charges in the fourth quarter of 2025, including six billion related to its EV plans. It idled battery plants in Ohio and Tennessee.

The autonomous driving retreat came earlier. In December 2024, GM shut down Cruise's robotaxi operations after years of investment and a series of safety incidents. Nearly 90 percent of the code for GM's autonomous driving software is now written by AI. This partly explains why the company needs fewer legacy IT workers.

The Company Is Profitable And Growing Earnings

The IT layoffs come after a strong first quarter. GM reported 43.6 billion dollars in revenue. Adjusted EBIT was 4.3 billion dollars, up 22 percent. Adjusted earnings per share were 3.70 dollars, beating Wall Street estimates by 40 percent. Net income was 2.6 billion dollars.

The company is profitable and generating strong cash flow from its North American truck and SUV business. The IT restructuring is not a distress signal. It is a company that can afford to rebuild its technology workforce choosing to do so while the core business is healthy.

Source

This story is based on reporting from The Next Web.