Google said on Friday that it would cut 12,000 people from the workforce, adding that US technology companies are cutting jobs due to fears of an impending recession.
Sundar Pichai, Google’s CEO, said in an email sent to the company’s staff on Friday that the company would immediately stop operating in the US. In other countries, the process “will take longer due to local laws and practices,” he said.
The web search and video sharing giant will offer US-based employees 16 weeks of severance pay plus two weeks for each additional year they have worked for Google, Pichai added.
Technology companies are facing a variety of challenges at the moment, not least the rise in interest rates and inflation in the past year that have clobbered technology stocks and forced advertisers to cut back on online advertising spending.
Interest rate hikes from the US Federal Reserve have particularly fueled appetite for American tech stocks. The gloomy macroeconomic climate is putting pressure on these companies to reduce their workforce.
On Wednesday, Amazon began a new wave of job cuts affecting more than 18,000 people. The same day, Microsoft announced plans to lay off 10,000 employees.
Twitter, under the leadership of Elon Musk, has also made redundancies, halving the number of company heads since he took over as CEO late last year.
The layoff move from Google Friday came after CNBC reported Wednesday that the company was delaying part of its employees’ year-end bonus checks until March or April instead of January.
Read the full memo Pichai sent to staff on Friday:
googlers,
I have some difficult news to share. We have decided to reduce our workforce by approximately 12,000 roles. We have sent a separate email to affected employees in the US. In other countries, this process will take longer due to local laws and practices.
This will mean saying goodbye to some of the incredibly talented people we work so hard to hire and enjoy working with. I apologize. The fact that these changes will affect the lives of Googlers is very important to me, and I am responsible for the decisions that lead us here.
Over the past two years, we have seen a period of dramatic growth. To match and fuel growth, we are hired for a different economic reality than the one we face today.
I believe in the great opportunity ahead of us because of the strength of our mission, the value of our products and services, and our early investment in AI. To fully capture it, we have to make hard choices. As such, we have conducted a rigorous review of product areas and functions to ensure that our employees and roles are aligned with our highest priorities as a company. The omitted roles reflect the results of the review. They cut Alphabet, product areas, functions, levels and regions.
To the Googlers who left us: Thank you for working so hard to help people and businesses everywhere. Your contributions are invaluable and we are grateful for them.
While this transition will not be easy, we will support our employees as they look for their next opportunity.
In the US:
- We will pay employees for the full notice period (minimum 60 days).
- We will also offer a severance package starting at 16 weeks of salary plus two weeks for each additional year at Google, and shortening the minimum 16 weeks of GSU vesting.
- We will pay the 2022 bonus and the remaining vacation time.
- We will offer 6 months of health care, job placement services, and immigration support to those affected.
- Outside the US, we will support our employees in accordance with local practices.
As a nearly 25-year-old company, we’ve always faced tough economic cycles. This is an important moment to sharpen your focus, redesign your cost base, and direct your talent and capital to your highest priorities.
Being limited in some areas allows us to bet big in others. The company’s pivot to AI-first last year led to breakthrough advances in our business and the entire industry.
Thanks to that initial investment, Google’s products are better than ever. And we’re getting ready to share some new experiences for users, developers and businesses. We have a huge opportunity in front of us with AI in our products and are ready to approach it boldly and responsibly.
All of this work is a continuation of the “healthy disregard for the impossible” that has been core to our culture since the beginning. When I look at Google today, I see the same passion and energy that drives our efforts. That is why I remain optimistic about our ability to carry out our mission, even on the most difficult days. Today is definitely one of them.
I’m sure you have many questions about how we will move forward. We will organize a town hall on Monday. Check the calendar for details. Until then, I hope you take care when absorbing this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today.
– Sundar