Google’s holding company, Alphabet, has revealed it will be laying off about 6% of its worldwide employees.
In an open letter issued by Google and Alphabet CEO Sundar Pichai, the business explained that it had “hired for a different economic reality” than what it is up against now, echoing the narrative of other corporations that have shrunk in recent months.
To put it plainly, it had increased its workforce during the pandemic-driven digital boom days, but now, as the world cuts back on spending in the face of economic headwinds, it must reverse course.
Layoffs will affect units across Alphabet, not just Google, and will touch all regions and product categories, Pichai said. “We’ve performed a rigorous evaluation across product areas and functions to ensure that our people and responsibilities are aligned with our highest priorities as a company.”
Massive layoffs in the technology industry
This means that of the five largest U.S. technology companies, four have now announced massive layoffs in recent months, with Apple being the only one to do so.
Indeed, Microsoft said this week that it will be laying off 10,000 employees, or nearly 5% of its staff, following Amazon’s decision to lay off 18,000 workers, or 1.2% of its global workforce, earlier this week. Meanwhile, Facebook’s parent company, Meta, announced 11,000 layoffs last November, or about 13% of its employees.
Enterprise software company Salesforce also just stated it was laying off 10% of its personnel at the turn of the year, affecting over 7,000 people, joining the ranks of other IT companies to announce substantial layoffs.
It’s important to remember that this isn’t the first time Alphabet has had to lay off employees. Last Monday, Verily’s biological sciences division reduced its workforce by 15%, or about 240 individuals, while Intrinsic, which develops software for robots, laid off 40 people, or 20% of its workforce.
According to the company’s announcement today, however, it will be eliminating some 12,000 jobs around the world.
What Alphabet is providing its U.S. workers in terms of severance appears reasonable at first glance. Company packages will “start at” 16 weeks’ salary plus an extra two weeks for every year worked, with full pay for the full 60-day notice period. All unpaid 2022 bonuses and vacation time will be paid in full, and there will be health insurance for six months and other benefits.
For markets outside the United States, Pichai just promised that Google would “help personnel in line with local practises.”
Pichai was quick to put a positive spin on the layoffs by arguing that good things can come out of bad situations.
He wrote, “As a corporation that’s almost 25 years old, we’re sure to see hard economic cycles.” The time is right to hone in, reengineer the company’s cost structure, and allocate resources to the most pressing issues.