General Motors (GM) has announced plans to eliminate approximately 200 engineering positions as part of its ongoing efforts to adapt and streamline operations. The company assures that affected employees will have the opportunity to transition into other roles within the organization.

This decision is part of GM’s broader strategy, called “Winning with Simplicity,” which aims to simplify design and engineering processes, reduce costs and complexity, and enhance marketing, engineering, and manufacturing efficiency. By significantly reducing the number of trim levels and part numbers, GM aims to retain desirable features while streamlining operations.

In a statement, GM confirmed the decision, stating that it is rebalancing its engineering resources to align with its growth strategy and will help engineers affected by the cuts to apply for other open positions within the company. GM is also targeting $2 billion in cost reduction over the next two years and plans to reduce sales and marketing finances by $800 million.

However, in addition to internal adjustments, GM also faces external pressures from changing industry regulations. The National Highway Traffic Safety Administration (NHTSA) has proposed a significant increase in Corporate Average Fuel Economy (CAFE) standards, which has sparked debates and concerns within the automotive sector, including GM.

Prior to the public release of the proposal, GM presented a claim to the Biden Administration warning that strict fuel economy standards could result in potential fines of up to $300 billion for automakers. However, as the proposal undergoes further examination, GM’s certainty regarding this figure has started to waver.