General Motors has decided to shut its IT Innovation Center in Arizona and sack as many as 940 information technology jobs. GM has IT centers in Warren, Michigan and Austin, Texas. It also has another similar unit in suburban Atlanta.
GM clarified that the decision is not part of cost cuts but was intended to streamline operations and attain efficiencies. However, the company has been cutting costs and trimming workforce in recent months.
The automaker had let as many as 5,000 salaried workers leave the company in April in a buyout program. The decision was part of the plans to cut as much as $2 billion in costs by the end of 2024. The auto giant had cut a few hundred jobs in February as well. GM said in July it was adopting another plan under which it cut another $1 billion in fixed costs.
GM, which cut a few hundred jobs in February, said in April about 5,000 salaried workers had taken buyouts to leave the automaker after it announced plans to cut costs by $2 billion by the end of 2024. In July, the company said it would cut another $1 billion in fixed costs over the same timeframe.
200 Engineering Positions Scrapped
"Today we announced the difficult decision to cease IDT (information and digital technology) operations at the Arizona IT Innovation Center at the end of October. This decision was not an easy one, but it will help to optimize our innovation center footprint and gain the efficiencies and effectiveness we need to have to continue to support the company," Stacy Lynett, GM's vice president of Information and Digital Technology, said in an email to employees.
The company explained that about 80 to 90 employees will be retained at the center. These are professionals working in software defined vehicle teams. Last week, it was reported that GM was letting go of 200 engineering positions.
The decision to close the center was a surprise as tGM opened its 170,000-square foot Arizona IT Innovation Center only in 2014 and was reportedly planning to ramp up staffing at the center.
"We're rationalizing the number of IT innovation centers we have in the country ... We're keeping the other three. But as we look at efficiencies there were some redundancies and that's why we decided to remove one of the centers," said GM spokesman Kevin Kelly.