Google is cutting 12,000 jobs, layoffs spread across the tech sector

LONDON (AP) — Google is laying off 12,000 employees, or about 6% of its workforce, becoming the latest technology company to cut staff as the economic boom the industry experienced during the COVID-19 pandemic fades.

Google CEO Sundar Pichai, who also heads parent company Alphabet, briefed staff at the Silicon Valley giant on Friday about the cuts in an email that was also posted on the company’s news blog..

It is one of the company’s largest-ever layoffs and adds to tens of thousands of other job cuts recently announced by Microsoft, Amazon, Facebook parent company Meta and other tech companies as they tighten their belts amid bleak industry prospects. At least 48,000 jobs have been cut by major companies in the sector this month alone.

“Over the past two years, we have experienced periods of dramatic growth,” Pichai wrote. “To match and drive that growth, we hired people for a different economic reality than the one we face today.”

He said the layoffs reflect a “rigorous review” by Google of its operations.

The jobs being cut “cross Alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” about the layoffs.

Regulatory filings illustrate how Google’s workforce grew during the pandemic, from 119,000 at the end of 2019 to nearly 187,000 people at the end of last year.

Pichai said Google, founded nearly a quarter of a century ago, would “go through difficult economic cycles”.

“These are key times to sharpen our focus, redesign our cost base and focus our talent and capital on our highest priorities,” he wrote. He called the company’s investments in artificial intelligence an area of ​​opportunity.

According to Pichai’s letter, jobs will be cut in the US and other unnamed countries.

The tech industry has been forced to freeze hiring and job cuts “as the clock has struck midnight on hypergrowth and digital advertising headwinds are on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi and John Katsingris wrote Friday.

This week Microsoft announced the cut of 10,000 jobs, or nearly 5% of the workforce. Amazon said this month it is cutting 18,000 jobs, though that’s a fraction of its 1.5 million employees, while software maker Salesforce is laying off about 8,000 employees, or 10% of the total. Last fall, Facebook mother Meta announced it would cut 11,000 jobs, or 13% of its employees. Elon Musk cut jobs at Twitter after acquiring the social media company last fall.

This job loss also affects smaller players. UK-based cybersecurity firm Sophos has laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase cut 20% of its workforce, about 950 jobs, in its second round of layoffs in less than a year.

“The stage is set: technology names across the board are cutting costs to preserve margins and get leaner” in the current economic climate, the Wedbush analysts said.

US employment is resilient despite signs of a slowing economy, adding another 223,000 jobs in December. Yet the technology sector has been growing exceptionally fast in recent years due to increased demand as workers began working remotely.

CEOs of a number of companies have taken the blame for growing too fast, but those same companies, even after the latest round of job cuts, remain much larger than they were before the economic boom of the pandemic began.

In their resignation announcements, both Pichai and Microsoft CEO Satya Nadella emphasized the importance of capitalizing on their advancements in artificial intelligence technology, due to renewed competition among the tech giants fueled by Microsoft’s growing partnership with San Francisco startup OpenAI.

Leave a Comment