General Motors to Boost Headcount

According to Reuters, General Motors Company (GM - Analyst Report) is planning to increase its workforce at the new information technology center in Austin, Texas, by adding up to 500 workers. The new employees will be engaged for improving the internal information technology capabilities of the company.

The planned workforce expansion represents the first move by the company to achieve its goal of brining majority of its IT workers in-house, which will enhance its efficiency and productivity over the next three years. Thus, the company plans to employ software developers, database experts and others in Austin. Apart from Austin, the company also plans to open three more information technology centers in the U.S.

General Motors outsources about 90% of its IT work and the remaining 10% is done internally. The company now plans to reverse the situation and bring innovation and development in its IT segment. This strategy will support the overall business of the company.

General Motors, in the second quarter of 2012, registered a 41% decline in its profit to $1.49 billion or 90 cents per share from $2.52 billion or $1.54 in the corresponding quarter of 2011. Nevertheless, the earnings per share exceeded the Zacks Consensus Estimate by 15 cents.

Total revenues fell 4.5% year over year to $37.60 billion in the quarter, missing the Zacks Consensus Estimate of $37.98 billion. The declines in the profit and revenues were attributable to strengthening of U.S. dollar against most of the major currencies as well as weak macroeconomic conditions globally, especially in Europe and South America.

The company’s competitor Ford Motor Co. (F - Analyst Report) is increasing its workforce at the Flat Rock Assembly plant by adding roughly 1200 workers to produce the 2013 Fusion sedan. Currently, General Motors retains a Zacks #3 Rank, which translates into a short-term Hold rating.