Shares of General Motors (GM) are down in today’s trading as the automaker plans to cut 1,000 salaried jobs to improve efficiency and productivity, according to Bloomberg. Most of the layoffs will occur in North America, but global operations will also be impacted. It is no secret that the auto industry is very competitive. Therefore, reducing costs where possible is necessary in order to keep up with the competition.

Interestingly, the layoffs come after GM reported a 10.5% increase in Q3 sales and improved profitability, which was partly due to cost-cutting in its electric vehicle (EV) business. CEO Mary Barra noted that while EV costs are stabilizing, further cuts are necessary to optimize the margins of internal combustion engine (ICE) vehicles that still make up 80% of GM’s U.S. business. And GM is likely to benefit from its ICE vehicles as Trump’s election victory is expected to ease regulations on ICE vehicles.

However, as legacy automakers may benefit from fewer regulations, they will likely also struggle with their EV operations. This is because Trump’s transition team plans to eliminate the $7,500 tax credit for electric vehicle purchases, according to Reuters. What is interesting is that Tesla (TSLA) representatives support ending the subsidy. Indeed, earlier this year, Tesla CEO Elon Musk noted that removing the tax credit would significantly harm its U.S. EV competitors but only slightly impact Tesla sales.

GM Issues a Recall

In a separate development, GM issued a recall for 462,000 diesel-powered pickups and SUVs due to issues with transmission control valves that could cause harsh shifting or rear-wheel lockup. This recall includes models like the Chevy Silverado and GMC Sierra. GM dealers will provide software updates and warranty coverage for repairs.

What Is GM’s Price Target?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 10 Buys, six Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 110% rally in its share price over the past year, the average GM price target of $56.67 per share implies 1.5% downside risk.

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