Google says it will lay off 12,000, or 6%
Search giant Google dwarfed Microsoft’s announcement of mass layoffs, with CEO Sundar Pichai telling employees Friday that 12,000 roles would be cut globally — about 6% of its workforce.
Economists have said hiring sprees by big tech companies during the pandemic left them top heavy, and many recent layoffs in the sector were part of a rebalancing as the economy slowed. That appeared to be the case with the Google cuts.
“Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” Pichai wrote to employees in a note. Like other recent tech CEOs before him who have cut staff, he apologized and said he took responsibility for the decision’s impact on people’s lives.
Google’s parent company, Alphabet, has about 187,000 employees globally, a recent regulatory filing showed. It wasn’t immediately clear how many people would be affected in Google’s Mountain View headquarters, or throughout the Bay Area. Reports last year suggested the company has 45,000 employees in this region.
Neither Google nor its parent company Alphabet had filed mass layoff notices with the California Employment Development Department this week, the agency said. The notices are required by law when a large company makes sizable cuts. If an affected employee’s last day is more than 60 days from Friday, the company would not have to file the notices yet.
In a statement, the Alphabet Workers Union, which represents more than 1,000 of the company’s contractors and employees on a minority basis, slammed the decision.
“In one email Sundar Pichai has taken away the livelihoods of thousands of workers,” Parul Koul, executive chair of the union, said in a statement. “This is egregious and unacceptable behavior by a company that made $17 billion dollars in profit last quarter alone.”
Alphabet is expected to announce fourth-quarter earnings next month. In its third-quarter results, the company saw 6% revenue growth compared to the same quarter in 2021. That was far below the 41% revenue jump between the third quarter of 2020 and the same period of 2021.
Pichai said the company had taken a hard look at its products and services, and the cuts reflected sections of the business that did not pass muster. The jobs being eliminated “cut across Alphabet, product areas, functions, levels and regions,” Pichai said, adding he was “deeply sorry” for the layoffs.
He noted the company’s early investments in AI, hinting that the hot industry could see increased attention.
Pichai said Google will pay U.S. employees during the legally required 60day notification period and offer them 16 weeks of severance pay, with more depending on seniority at the company, along with accelerated stock vesting.
The company would pay out employee bonuses and vacation time, and offer six months of health care, as well as job placement and immigration services for employees that needed them, he added.
The cuts come as layoffs have roiled the technology industry in recent months, and as fears of an economic slowdown and apparent over-hiring during the pandemic created pressure for companies to streamline their operations.
Salesforce, San Francisco’s largest private employer, said this month it would slash 8,000 jobs, about 10% of its workforce, while online retail giant Amazon also said late last year that it planned to cut 10,000 workers.
Twitter has reportedly laid off about 67% of its once 7,500-person strong workforce since Elon Musk bought the company late last year. Since then, companies in tech, from cryptocurrency to biosciences to software, many of whom hired aggressively during the pandemic, have cut staff.