General Motors may be planning a dramatic strategy shift in China

General Motors Company (NYSE:GM) has reportedly been laying off staff in China and plans to meet with local manufacturing partner SAIC to discuss a larger structural overhaul of the China business.

Sources said that the Detroit automaker is cutting staff in Chinese market-related departments, including research and development. Reductions in factory capacity and additional job cuts are still believed to be under consideration. The expectation is that a formal announcement from GM (GM) and SAIC on production cuts could be made within weeks.

The shift in strategy is dramatic, since General Motors (GM) earned billions of dollars in China as recently as 2018. General Motors’ (GM) partnership with SAIC Motor, China’s largest automaker, has been considered a cornerstone of GM’s strategy in the Chinese market since 1997. The joint venture, known as SAIC-GM, allowed General Motors (GM) to become a dominant player in China’s automotive sector, manufacturing and selling Chevrolet, Buick, and Cadillac vehicles. The collaboration also provided GM with access to local market insights, government support, and a strong competitive position against domestic manufacturers.