Google’s parent company Alphabet announced about 12,000 job cuts worldwide on Friday citing changing “economic realities”, becoming the latest US tech giant to undertake a large-scale restructuring.
The layoffs come a day after Microsoft said it would cut up to 10,000 staff in the coming months, following similar cuts at Facebook owner Meta, Amazon and Twitter as the previously unstoppable tech sector battles a major economic downturn.
Google vs labor law
“Over the past two years, we have seen a period of dramatic growth. To match and accelerate that growth, we are hiring a different economic reality than we are facing today,” Alphabet CEO Sundar Pichai said in an email to employees.
“We have conducted a rigorous review of product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company,” Pichai said, adding that the workforce will be reduced by about 12,000 roles.
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“The eliminated roles reflect the results of the review.”
Alphabet employs nearly 187,000 workers worldwide by the end of September 2022. The cuts represent more than 6 percent of its total workforce.
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Pichai said American employees have been notified of the cuts while reductions in other countries will take longer due to local labor laws.
The cuts will be “across departments, functions, levels of responsibility and regions,” Pichai added.
“The fact that these changes will affect the lives of Googlers means a lot to me, and I take responsibility for the decisions that lead us here.”
– ‘Unsustainable’ –
Pichai announced a severance package for US employees, who will receive at least 16 weeks of pay, a 2022 bonus, paid vacation and six months of health coverage.
He said he remains “optimistic about our ability to carry out our mission, even on the most difficult days.”
Wall Street welcomed the cut: Alphabet shares rose 3.5 percent in electronic trading before the stock market opened.
Analysts have said that the tech big guns were previously overspent, not seeing a slowdown on the horizon.
Daniel Ives of Wedbush Securities said the layoffs highlighted irresponsible spending in a sector experiencing “hypergrowth”.
“The fact is that the tech stalwarts are overhired at an unsustainable pace and now the macro darkness is forcing these layoffs in the tech space,” he said.
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According to tech site Layoffs.fyi, nearly 194,000 industrial workers have lost their jobs in the US since the start of 2022, not including those announced by Alphabet on Friday.
Hewlett Packard and cloud computing giant Salesforce also announced big cuts this month as high inflation and interest rate hikes have dragged on for a long time.
The US tech giant has also come under scrutiny in the European Union, which has begun imposing regulations to prevent tax evasion, stifling competition, profiting from unpaid news content and becoming a platform for disinformation and hate.
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