Google to slash 12,000 jobs as tech industry layoffs surge
Google is laying off 12,000 workers, becoming the latest technology company to trim staff after rapid expansions during the COVID-19 pandemic have worn off.
Alphabet CEO Sundar Pichai shared the news Friday in an email to staff at the Silicon Valley giant that was also posted on the company's news blog.
"Over the past two years we've seen periods of dramatic growth," Pichai wrote. "To match and fuel that growth, we hired for a different economic reality than the one we face today."
He said the layoffs reflect a "rigorous review" carried out by Google of its operations. The jobs being eliminated "cut across Alphabet, product areas, functions, levels and regions," Pichai said.
The cuts represent just over 6% of Alphabet's workforce, which numbered 186,000 as of September, according to a securities filing. Like numerous other large tech companies, Alphabet added thousands of workers durning the pandemic and is now moving to cut costs ahead of a possible economic recession later this year.
Laid-off employees in the U.S. will receive a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, as well as six months of health care, job placement services and immigration support.
Added Pichai, "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."
Earlier this week, Microsoft announced 10,000 job cuts, or nearly 5% of its workforce. Also in January, Amazon said it would cut 18,000 jobs, Facebook parent Meta announced it is eliminating 11,000 positions and software maker Salesforce said it would shed 7,000 workers. Netflix, Peloton, Twitter and other industry players have also announced sizable layoffs or scaled back hiring in recent months.
"All the tech giants have now entered the layoff game," Wall Street analyst Adam Crisafulli of Vital Knowledge said in a report, adding that "myriad others are reducing jobs, too."
Job cuts are hitting smaller players as well. U.K.-based cybersecurity firm Sophos 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 technology industry shed the most jobs of any sector last year, eliminating nearly 100,000 positions in 2022 after expanding rapidly during the pandemic, according to Challenger, Gray & Christmas.
"We are seeing 5%-10% headcount cuts across the tech sector as many of these companies (both big and small) were spending money like 1980s rock stars and now need to rein in the expense controls ahead of a softer macro," Wedbush Securities analyst Dan Ives said in a research note.
Economic growth has weakened as the Federal Reserve moves to sharply raise its benchmark interest rate in an effort to tame inflation. Although experts forecast a slowdown in the labor market this year, hiring across the U.S. has remained robust. The nation's unemployment rate in December fell to 3.5%, matching a 50-year low.