General Motors (GM) stock was under pressure on May 11 after the automaker reportedly began laying off hundreds of its information technology (IT) workers to streamline operations.
The selloff saw GM crash below its 20-day and 50-day moving averages (MAs), signaling shifting momentum in favor of the bears.
General Motors shares have been a disappointing investment in 2026, currently down roughly 12% versus their year-to-date high in late January.
What We Know About GM’s Announced Layoffs
GM has confirmed plans of eliminating at least 500 salaried positions within its global information technology division.
These cuts are part of a broader transformation intended to reduce fixed costs and reshape the workforce to better support emerging software-driven initiatives.
According to General Motors, these layoffs are essential to clear the way for hiring new talent with specialized skills in areas like AI and autonomous systems, reflecting a pivot away from legacy IT roles.
Note that GM shares are now trading at a forward price-to-earnings (P/E) ratio of just over 6x — a valuation multiple that makes them significantly less expensive to own than peer Ford Motor (F).
What These Layoffs Mean for General Motors Stock
The layoffs arrive shortly after General Motors posted solid Q1 results, reinforcing that the layoffs aren’t borne out of financial distress.
Instead, they reflect a strategic realignment to maintain competitiveness in the digital age, which may reduce pressure on margins and position the company to dominate the software-defined vehicle market.
In a way, therefore, the announcement is actually constructive for General Motors stock as it could trigger a valuation re-rating, forcing the market to price it as a tech leader rather than a traditional cyclical manufacturer.
What’s also worth mentioning is that GM currently pays a dividend yield of 0.95%, which makes it even more attractive as a long-term holding in 2026.
How Wall Street Recommends Playing General Motors
Wall Street analysts seem to be looking beyond the layoffs announcement as well.
According to Barchart, the consensus rating on GM stock sits at “Moderate Buy,” with the mean price target of nearly $93 indicating potential upside of about 23% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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