Posted Jan 20, 2023, 1:23 PM
After Meta, Microsoft and Amazon, Google is in turn cutting staff. The American giant is preparing to lay off 12,000 employees, or more than 6% of its global workforce. Sundar Pichai, the CEO of Google and Alphabet, announced this Friday in a blog post and an email sent to all teams. The boss spoke of one of the “hardest” days in the history of the group which will soon celebrate its 25th anniversary.
“The fact that these changes will affect the lives of Googlers (Google employees, editor’s note) weighs heavily on me, and I take full responsibility for the decisions that led us there,” wrote the leader in his message. The American giant does not specify which specific functions are concerned. But the cuts apply to “all Alphabet, all products, functions, levels and geographies”. The professions preserved are those that are “aligned with the highest priorities of the company”, in particular artificial intelligence. Contacted, Google had no information on possible layoffs in France.
The announcement comes as Google, which employed more than 186,000 people worldwide at the end of September, is due to present its annual results on February 2, in two weeks. It confirms the economic slowdown that has affected the entire tech sector for months. Counting the social plans at Meta (11,000 employees affected), Microsoft (10,000) Amazon (18,000) and Twitter (3,700), almost 55,000 jobs at the tech giants are disappearing. At this stage, only Apple has maintained its workforce, the group having been protected by its hybrid model combining hardware, services and content.
A “very different” economic reality
Conversely, like Meta, Google is particularly exposed to online advertising, which represents almost 80% of its revenue. However, since the war in Ukraine and the macroeconomic slowdown that followed, advertisers are reducing their advertising expenditure.
In the third quarter, the revenue that Google generates through advertising only increased by 2.5%. Advertising revenue from YouTube, Google’s video platform, fell by almost 2%. In addition to weaker growth, all revenues combined, the American giant had also recorded a sharp decline in its net income, which had shrunk by a quarter.
Sundar Pichai acknowledged these difficulties. The paradoxically positive page of the Covid, when the pandemic had caused an explosion in the time spent online, seems definitively turned. “Over the past two years, we have experienced periods of very strong growth. To respond to and nurture this growth, we recruited, but it was a very different economic reality from the one we face today,” writes Sundar Pichai.
Substantial opportunities with AI
The boss of Google nevertheless wants to be optimistic. “With artificial intelligence, we have a substantial opportunity in front of us,” writes Sundar Pichai. A message that comes as the ChatGPT robot from its rival OpenAI has been all the rage in recent weeks, to the point of eclipsing Google’s advances in this area.
In the United States, affected employees will continue to be paid for at least 60 days. An indemnity representing 16 weeks of salary plus 2 weeks for each additional year of seniority will also be paid, as well as the 2022 bonuses. The employees were invited to telecommute this Friday. A group meeting (“townhall meeting”) will take place on Monday.