Moreover, employers want students who understand the material. GPA is only one of the several indications. Your response to technical questions during a job interview is another gauge. GPA is more often an indication of work ethic than it is an indication of true understanding of the material. Although GPA plays a somewhat important part in applications for employment, it plays a more substantial role in graduate school.
Graduate schools tend to want students with intellectual ability and a good work ethic.
GPA is a fairly good indicator of both of these. Thus, it is one of the more important factors among the many considerations that include standardized test scores, recommendations, and letters of intent. Some top graduate schools have very strict GPA requirements, and the top echelon of engineering departments have average GPAs of around 3.5 and up. Some graduate schools will look only at the grades from technical courses. Others look at your grades from the final two years, and some will look at your cumulative grade point average.