Alphabet, the parent company of Google, announced Friday, January 20, the loss of approximately 12,000 jobs, or more than 6% of its global workforce, across the company. Chief Executive Sundar Pichai said in an email to employees that he was taking “full responsibility for the decisions that brought us here”.
“Over the past two years, we have experienced periods of spectacular growth”Mr. Pichai insisted. “To support and fuel this growth, we have hired in a different economic context than the one we know today”he added, specifying that the economic situation forced the company to reduce the workforce.
Alphabet had nearly 187,000 employees worldwide at the end of September 2022. They will be “across departments, functions, levels of responsibility and regions”, said Mr. Pichai. Affected US employees have already been notified. In other countries, the procedure will take longer depending on local labor law.
In the United States, the laid-off employees will receive at least sixteen weeks of salary, their bonuses for 2022, their paid holidays as well as six months of health coverage. Foreign employees settled in the United States will also be able to benefit from assistance in their legal procedures if they wish to remain on American soil. Other regions receiving packages based on local laws and practices.
Slowdown in digital advertising
With the layoffs, Google joins a host of other big tech groups that have cut back dramatically amid a faltering global economy and soaring inflation. Meta – the parent company of Facebook, Instagram and WhatsApp –, Twitter and Amazon have all downsized.
The American computer group Microsoft announced on Wednesday the layoff of around 10,000 employees by the end of March. According to the specialized site Layoffs.fyi, nearly 194,000 employees in the sector have lost their jobs in the United States since the start of 2022, not counting Alphabet’s announcement on Friday.
Thanks to the resilience of its search business, Google has been one of the tech companies that has long avoided major downsizing, but the company is facing a slowdown in digital advertising.
“This is an important time to refocus our focus, reorganize our cost base and direct our talent and capital to our highest priorities”, writes Mr. Pichai in his email. He said the company had “a substantial opportunity ahead of her” with artificial intelligence, a key investment area where Google is facing increased competition.
In October, the company reported earnings and revenue that fell short of analysts’ expectations. Profit fell 27% to $13.9 billion from a year earlier. Wall Street welcomed the announcement of these job cuts positively: Alphabet’s stock rose 3.5% in electronic trading prior to the opening of the New York Stock Exchange.