Google is laying off 12,000 of its employees, parent company Alphabet announced on Friday.
Google parent Alphabet said that the layoffs were due to a “changing economic reality” and that hires had been made during times of growth. The move follows similar cuts at Microsoft, Amazon and Twitter. The layoffs come after similar job cuts at other tech giants, including Microsoft, Amazon, Facebook and Twitter.
Google hired vigorously as demand for its services rose during the health crisis, leading to more than 50% growth in total employee count across Alphabet since the end of 2019. The cuts this week appeared to fall short of the almost 12,800 employees, Alphabet added to its roster in the third quarter last year.
What did Google say about the layoffs?
“We’ve decided to reduce our workforce by approximately 12,000 roles,” Alphabet CEO Sundar Pichai said. Pichai said that the cuts were in response to a changing “economic reality” and that the hires had been made during “periods of dramatic growth.”
“We’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company,” Pichai said. “The roles we’re eliminating reflect the outcome of that review.”
“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here,” he added.
Pichai said that the layoffs “cut across” product areas, functions, levels and regions.
Google is not the only tech giant to have seen major layoffs in recent times. The move comes a day after Microsoft said it would also reduce staff numbers by 10,000, equivalent to nearly 5% of its workforce. Amazon said earlier this month that it would make 18,000 layoffs, and Facebook owner Meta announced in November that it would be cutting 11,000 positions, or around 13% of its workforce. Twitter saw massive job cuts after Elon Musk, who is also the CEO of Tesla and SpaceX, took the helm of the company late last year.
Alphabet recorded $17.1 billion of operating income in the third quarter last year, an 18.5% decrease from the same period in 2021. Google executives partly blamed a slowdown in revenue growth on the company’s past performance during the end of the pandemic. Alphabet shares rose 5.3% to $98.02 in Friday trading.
Alphabet earlier this month said it would cut more than 200 jobs at its Verily Life Sciences healthcare business, accounting for about 15% of the roles at the unit. Before that, some of the last major cuts Google announced were in 2009, when the company said it was reducing the number of jobs in its sales and marketing teams by roughly 200 globally.
Current and former Google employees said layoffs would likely affect the company’s famously loose and collegial culture, which has been widely imitated in the tech industry.
“Alphabet leadership claims ‘full responsibility’ for this decision, but that is little comfort to the 12,000 workers who are now without jobs,” said Parul Koul, executive chair of the Alphabet Workers Union, in a statement. “This is egregious and unacceptable behaviour by a company that made $17 billion dollars in profit last quarter alone.” Alphabet said it would offer U.S.-based employees two months’ notice, plus 16 weeks of severance pay, along with two additional weeks for each year an employee being laid off from the nearly 25-year-old company has worked there. In other countries, the company will follow local processes and laws, which sometimes require consultations with employee representatives before workers are laid off. The company will also offer former employees access to resources to help them with their immigration status, job placement and mental health, the spokesman said. Tech companies in the U.S. often have employees on work visas tied to their employment.
What Employees Impacted by Google Layoffs 2023 Will Be Offered
Pichai adds that while this transition would not be easy, they would offer their employees in the United States the following benefits to help them stay afloat:
- Employees would be paid during the full notification period, that shall be of minimum of 60 days.
- A severance package starting at 16 weeks salary, plus two weeks for every additional year at Google will be offered, and accelerated at least 16 weeks of GSU vesting.
- Outside the US, employees will be supported in line with local practices.
- 2022 bonuses and remaining vacation time will also be given.
- Six months of healthcare, job placement services, and immigration support will be offered for those affected.
Pichai further went on to add that being constrained in certain areas would allow the company to bet big on others. “As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he says. Fired employees were also asked to work from home for the day to help them “absorb the difficult news.”