In response to the waning economic boom that the technology industry rode during the COVID-19 epidemic, Google has announced that it will lay off 12,000 employees, or around 6% of its workforce.
Alphabet CEO Sundar Pichai, who also serves as Google’s CEO, sent out an email to employees on Friday detailing the layoffs; the message was also published on the company’s news blog.
This is one of the largest rounds of layoffs in the company’s history, and it follows the thousands of jobs lost at Microsoft, Amazon, Facebook parent Meta, and other internet companies as they cut costs in response to the industry’s deteriorating outlook.
At least 48,000 layoffs have been announced by large corporations in the sector only this month.
According to Pichai’s memo, “during the past two years we’ve seen moments of rapid growth.” We made hires anticipating a different economic climate than the one we now confront in order to keep up with and fuel that expansion.
He explained that the layoffs are the result of Google doing a “rigorous evaluation” of the company.
A wide variety of positions “across Alphabet, product categories, functions, levels, and geographies” are being terminated, Pichai stated. His words were “truly regretful” for the layoffs.
According to SEC filings, Google‘s employment increased from 119,000 at the end of 2019 to approximately 187,000 by the end of 2018.
Google was formed about 25 years ago, thus Pichai acknowledged that the company was “bound to go through challenging economic cycles.”
“These are critical times for us to hone in on our priorities, reengineer our cost base, and allocate our talent and resources accordingly,” he wrote.
Pichai’s letter implies that layoffs will occur in the United States and possibly other locations.
“as the clock has struck midnight on hyper growth and digital advertising headwinds are on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi, and John Katsingris said on Friday. This has caused the IT industry to halt hiring and reduce employment.
Microsoft just announced the elimination of 10,000 jobs, or approximately 5% of its workforce. The commercial software company Salesforce is laying off around 8,000 people, or 10% of the total, while Amazon said this month that it will be shedding 18,000 jobs, though this is only a percentage of the company’s 1.5 million strong workforce.
Meta, Facebook’s parent company, announced 11,000 job cuts, or 13% of the workforce, in the fall. After acquiring the social media platform last fall, Elon Musk immediately began cutting positions.
These layoffs are having a significant impact on smaller businesses as well. Sophos, a cybersecurity company based in the United Kingdom, had to lay off 450 workers, or 10% of its global staff. Approximately 950 employees, or 20% of the company, were eliminated at cryptocurrency exchange platform Coinbase in its second wave of layoffs in a little under a year.
According to the Wedbush analysts, “the stage is being set: tech names across the board are slashing expenses to preserve margins and becoming leaner” in the present economic context.
Despite warnings of an economic slowdown, the United States managed to add 223,000 new jobs in December. However, the tech industry has expanded at an unprecedented rate over the past several years as a result of rising demand brought on by the rise of the telecommuting workforce.
Even after the most recent round of layoffs, several companies are larger than they were before the economic boom brought on by the pandemic. CEOs of many companies have been criticized for growing too quickly.