General Motors Co. is shuttering an IT center in Arizona, affecting approximately 940 salaried employees there, the Detroit automaker said Wednesday.
GM spokesperson Kevin Kelly said that in evaluating the company’s IT footprint, which includes three other facilities in the United States, the Arizona center was deemed redundant.
“As part of GM’s continued transformation, and to better align our Innovation Center footprint and IT resources in the US, we have made the decision to cease our IT operation at our Chandler, AZ, Innovation Center later this year,” he said in a statement. “Employees working in our software defined vehicle teams will remain in AZ. Affected employees will have an opportunity to apply for open positions.”
The 940 IT employees affected by the closure will have until the end of October to find other jobs within the company; those who don’t could be eligible for severance packages, according to Kelly.
GM opened the Arizona facility in 2014. The center supports GM’s IT needs including web technologies, end-user applications, dealer and factory systems, and vehicle technology, according to the company’s website.
The move follows GM’s decision to eliminate and realign approximately 200 engineering jobs, which it confirmed last week.
Engineers working in unspecified departments received notice from the company that their positions have been eliminated but that they were being offered other opportunities within the company.
The company said that decision was part of its “winning with simplicity” strategy that CEO Mary Barra announced during GM’s second-quarter earnings report. Product teams at the automaker are using the strategy to “reduce design and engineering expense, supplier cost, order complexity, buildable combinations and manufacturing complexity,” Barra said.
GM previously said it was trying to cut costs by $2 billion, but now is targeting $3 billion in cost reductions through 2024. It’s looking to achieve those reductions by lowering its salaried workforce headcount, removing vehicle complexities, cutting spending in sales and marketing, and lowering administrative and travel costs.
Earlier this year, the automaker offered buyouts to most of its salaried employees and approved about 5,000 employees to take them, enabling about $1 billion of cost savings. During second-quarter earnings, CFO Paul Jacobson said the further cost reductions that GM is targeting “doesn’t contemplate any additional reductions beyond what I would consider to be normal attrition.”
The Detroit Free Press first reported news of the planned IT center closure.
jgrzelewski@detroitnews.com
Staff Writer Kalea Hall contributed.