Google’s parent company, Alphabet, announced on January 20th that it will be cutting 6% of its workforce, which is around 12,000 jobs globally. The announcement was made by CEO Sundar Pichai in an email to employees. Pichai stated that he takes “full responsibility for the decisions that led us here.”
Alphabet is the company behind Google, YouTube, and other popular products that are used by billions of people. However, the company is now in competition with Microsoft in an area called generative artificial intelligence.The job cuts will affect teams across the entire company, including recruiting and some corporate functions, as well as some engineering and product teams. The layoffs will impact US staff immediately and will be global. This move by Google joins a host of other tech giants such as Microsoft, Meta Platforms, Twitter, and Amazon.com, who have drastically scaled back operations amid a faltering global economy and soaring inflation.
Pichai also added that the tech giant will “support employees as they look for their next opportunity.” In the US, Google will pay employees during the full notification period (minimum 60 days) and will offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting. The company will also pay 2022 bonuses, remaining vacation time and will be offering 6 months of healthcare, job placement services, and immigration support for those affected. Outside the US, Google will support employees in line with local practices.
This announcement comes just after Reuters reported that Google is deferring a portion of its employees’ year-end bonuses as part of a transition to a new performance management system. The company will pay 80% advance bonus to eligible employees initially and the remainder in later months, a spokesperson told Reuters, adding that the move was communicated to staff last year.
In October, Google reported earnings and revenue that missed analyst expectations. Profit declined 27 percent to $13.9 billion compared to the prior year. At that time, Pichai said Google would curb its expenses and Chief Financial Officer Ruth Porat said the number of new jobs would fall by more than half in the fourth quarter from the previous period.