Google’s parent Alphabet Inc (GOOGL.O) is cutting about 12,000 jobs as it faces “a different economic reality”, it said in a staff memo, doubling down on artificial intelligence (AI) and axing staff who support experimental projects.
The job cuts affect 6% of its workforce, and follows thousands of layoffs at tech giants including Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O) and Meta Platforms Inc (META.O) who are downsizing after a pandemic-led hiring spree left them flabby in a weak economy.
Mr Pichai thanked staff for “working so hard” in their roles, adding that their “contributions have been invaluable”. He wrote: “While this transition won’t be easy, we’re going to support employees as they look for their next opportunity. “Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today.”
According to a recent filing with Companies House, Google has more than 5,500 staff in the UK. But it is unclear how many of these will be affected by the cuts.
Mr Pichai announced severance packages for US employees, who will receive at least 16 weeks of salary, their 2022 bonus, paid vacations and six months of health coverage. He said he remained “optimistic about our ability to deliver on our mission, even on our toughest days”.
Analysts have said tech’s big guns had previously overspent, not seeing a slowdown on the horizon.
Daniel Ives of Wedbush Securities said the layoffs highlight irresponsible spending across a sector basking in “hypergrowth”. “The reality is tech stalwarts over-hired at a pace that was unsustainable and now darker macro is forcing these layoffs across the tech space,” he said.
According to tech site Layoffs.fyi, nearly 194,000 industry employees have lost their jobs in the US since the beginning of 2022, not including those announced by Alphabet on Friday.
US tech giants have also been facing scrutiny in the European Union, which has started enforcing regulations to stop them avoiding tax, stifling competition, profiting from news content without paying and serving as platforms for disinformation and hate.
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