Detroit automakers cut more than 20,000 U.S. payroll jobs as AI looms

DETROIT — As artificial intelligence develops, it threatens to exacerbate a growing trend among America’s largest automakers: the elimination of white-collar workers.

Detroit’s “Three” automakers have collectively cut more than 20,000 U.S. payroll jobs, or 19% of their combined workforce, compared to recent employment peaks this decade, according to public filings and company employment data.

The reasons for this employment decline vary among automakers, but generally relate to evolving technological changes in the auto industry, with the rise of software-defined vehicles, autonomous and fully electric vehicles, and, more recently, AI.

“Artificial intelligence is going to replace literally half of all white-collar workers in the United States,” Ford CEO Jim Farley said in July at the Aspen Ideas Festival. “AI is going to leave a lot of white-collar workers behind,” he later added.

America’s largest automaker led the cuts, with General engines reduce the number of employees in the United States by about 11,000 people between 2022 and last year. These job cuts came after GM saw employment rise from 48,000 white-collar workers in the United States in 2020 to 58,000 in 2022.

Ford engine and parent company of Chrysler Stellantis have eliminated jobs more gradually. Since its peak in payroll employment in 2020, Ford has cut about 5,300 workers to about 30,700 white-collar workers last year, while Stellantis went from 15,000 payroll workers in 2020 to about 11,000 during that period.

On an annual basis, combined white-collar employment at the three automakers peaked at about 102,000 jobs in 2022. It fell 13 percent, to 88,700 people, at the end of last year.

Gad Levanon, chief economist at the Burning Glass Institute, a nonprofit specializing in labor data, said he thinks the jobs most likely to be replaced by AI are clerical positions and more repetitive office jobs, such as those in finance and information technology, including coding.

“Many white-collar workers will lose their jobs because AI can automate some of their tasks,” he said, adding that some losses will be offset by jobs in areas of growing importance to automakers, such as autonomous vehicles, cybersecurity and software-defined vehicles. “I think this will be a major trend over the next ten or twenty years.”

GM added to its cuts this week by laying off between 500 and 600 workers worldwide, largely in information technology operations in Texas and Michigan, people familiar with the matter told CNBC, speaking anonymously on details that had not been made public. These reductions were partly due to changing workforce needs in the AI ​​field, the sources said.

GM’s layoffs come as the automaker increasingly hires for AI-related jobs and encourages workers, including in IT, to adopt its AI platforms, according to a handful of current or former GM employees and the company’s recruiting website.

“They’re going to promote AI for everyday work and everything else,” a veteran programmer and data scientist at GM who was laid off this week told CNBC, speaking anonymously for fear of repercussions or impacts on potential future jobs. “I’ve seen it firsthand. It can make you a lot more productive as a programmer. It can definitely help you get more work done, but AI won’t do you any good if you don’t know the craft.”

Prior to the IT reductions, notable decreases in GM’s U.S. salaried workforce occurred following the liquidation and eventual shutdown of its cruise robotaxi business as well as ongoing assessments of the company’s workforce under GM CEO Mary Barra.

“Sometimes the people who got you to ‘point A’ aren’t necessarily the people who will get you to ‘point B,'” Barra said at an Automotive Press Association meeting in January about turnover in the automaker’s top ranks.

GM, Ford and Stellantis declined to comment on their reductions in the number of U.S. employees in recent years.

Automakers have previously cited “transformations,” “bold choices,” cost cutting and “strengthening” or improving the efficiency of a unit as reasons for job cuts.

The decline in salaried employment among the Detroit Three is not necessarily representative of the entire American auto industry.

The U.S. Bureau of Labor Statistics reports that automotive manufacturing jobs fell just 0.2% between 2022 and last year, to 285,800 workers. This data includes both salaried and hourly workers.

And not all automakers have cut payroll jobs in the United States. Toyota engine reported a roughly 31% increase in its U.S. white-collar workforce between 2020 and 2025, to about 47,500 people.

Ford, GM and Stellantis are also still recruiting for certain positions.

Stellantis CEO Antonio Filosa, who is leading a company-wide turnaround that includes a global cost-cutting program, said the company still plans to create more than 2,000 white-collar jobs in North America.

Combined, the Detroit automakers currently have more than 2,000 open positions in the United States, according to their job sites. Of the jobs posted, nearly 400 involve AI, and GM is seeking more than 250 positions dealing with AI, according to search results.

Lenny LaRocca, head of consultancy KPMG’s automotive sector in the Americas, said automakers need to be careful about how they execute their AI strategies with workers.

“They really need to think about how they adapt it and use it to produce, to be more efficient and more profitable,” he said. “I don’t necessarily know if it’s just to reduce headcount. I think the focus is more on how they do their jobs better and how to be more innovative and move faster.”

Job roles are rapidly evolving with AI, requiring new skills, according to a recent article by Gregory Emerson, managing director and senior partner at Boston Consulting Group.

BCG predicts that within five years — or perhaps later — 10 to 15 percent of U.S. jobs could be eliminated as AI proliferates, and that 50 to 55 percent of U.S. jobs will be reshaped by AI over the next two to three years.

“This shift is already underway and will accelerate as AI adoption becomes more widespread,” Emerson wrote in the co-authored report. “Those who downsize beyond the ability of AI to replace them will see productivity plummet, institutional knowledge disappear, and critical talent disappear. Those who fail to radically rethink work will see their competitors grow faster and more profitably.”