Google has joined several other tech giants in reducing headcounts with layoff plans of 12,000 of its employees or 6% of total staff in a drastic cost-cutting exercise amid fears of a looming recession.
It is the company's biggest-ever round of layoffs and adds to tens of thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent Meta and other tech companies as they tighten their belts amid a darkening outlook for the industry. Just this month, there have been at least 48,000 job cuts announced by major companies in the sector.
Sundar Pichai, the CEO of Google and parent company Alphabet, said in an email sent to the company’s staff on Friday that the firm will begin slashing jobs the U.S. immediately.
The jobs being eliminated “cut across Alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” for the layoffs.
Regulatory filings illustrate how Google’s workforce swelled during the pandemic, ballooning to nearly 187,000 people by late last year from 119,000 at the end of 2019.
In other countries, the process “will take longer due to local laws and practices,” he said, media reports suggest. The fear of layoffs began haunting Google employees in November of last year.
The web search and video sharing giant will offer U.S.-based employees 16 weeks of severance pay plus two weeks for each additional year they’ve worked at Google, Pichai added.
Google shares closed up more than 5% after the news.
Tech companies are facing a variety of challenges at the moment, not least rising interest rates and inflation over the past year that have clobbered technology shares and forced advertisers to cut back on online ad spending.
Hikes to interest rates from the U.S. Federal Reserve in particular have led to a souring appetite for American tech shares. The gloomy macroeconomic climate has in turn piled pressure on those companies to make deep cuts to their workforces.
On Wednesday, Amazon began a fresh wave of job cuts affecting more than 18,000 people. That same day, Microsoft announced plans to lay off 10,000 workers.
Twitter, under the leadership of Elon Musk, has also made redundancies, slashing over half of the company’s headcount since taking over as CEO in October.
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