Google’s parent firm Alphabet, the newest US tech behemoth to implement significant restructuring, announced the loss of 12,000 jobs globally on Friday, blaming a shifting economic landscape.
The layoffs come a day after Microsoft announced that it would decrease its workforce by 10,000 in the next months, following similar reductions by Facebook owner Meta, Amazon, and Twitter as the software industry confronts a severe economic recession.
Google Mass Layoffs
In the previous two years, we have had times of tremendous expansion. To match and fuel this expansion, Alphabet CEO Sundar Pichai wrote in an email to staff that the company hired based on a different economic reality than the current one.
We’ve conducted a comprehensive evaluation across product areas and departments to ensure that our people and responsibilities are aligned with the company’s highest priorities, Pichai stated, adding that approximately 12,000 positions would be eliminated.
The eliminated positions reflect the findings of that review.
By the end of September 2022, Alphabet employed nearly 187 thousand individuals worldwide. The layoffs represent roughly 6 percent of the company’s total staff.
Pichai stated that American employees have already been told of the layoffs, however, layoffs in other nations will take longer to implement due to local labor restrictions.
The reductions will occur across departments, functions, degrees of responsibility, and regions, as Pichai explained.
The fact that these modifications will affect the lives of Google employees weighs hard on my mind, and I accept full responsibility for the decisions that lead us to this point.
Pichai announced severance packages for U.S. employees, who would receive at least 16 weeks of pay, their bonus for 2022, paid vacations, and six months of health insurance coverage.
He stated that he remained optimistic about our potential to accomplish our mission, even on our most difficult days.
Wall Street applauded the reductions: Alphabet shares increased by 3.5% in electronic trading prior to the opening of the stock market.
According to analysts, tech’s heavy hitters previously overspent since they did not anticipate a slowdown. The layoffs, according to Daniel Ives of Wedbush Securities, are evidence of imprudent spending in a sector experiencing hypergrowth.
The reality is that tech giants overhired at an unsustainable rate, and now a darker macro environment is forcing layoffs across the tech industry, he said.
According to the technology website Layoffs. FYI, approximately 194,000 industry workers have lost their employment in the United States since the start of 2022, excluding the layoffs announced by Alphabet on Friday.
Hewlett-Packard and Salesforce, the industry leader in cloud computing, have also announced significant layoffs this month, as rising inflation and interest rates have hindered growth.
The European Union has begun enforcing legislation to prevent US digital firms from dodging tax, restricting competition, benefitting from news material without paying, and functioning as platforms for disinformation and hatred.