Google is cutting 12,000 jobs, or around 6% of its employees, making it the latest tech business to do so as the COVID-19 pandemic-related economic boom wanes.
Google parent firm Alphabet CEO Sundar Pichai told colleagues on Friday of the layoffs in an email that was also posted on the business' press blog.
It's one of the largest rounds of layoffs the company has ever experienced, and it joins the tens of thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent company Meta, and other tech companies as they tighten their belts in the face of a gloomier outlook for the sector. At least 48,000 job losses have been announced by significant corporations in the industry only this month.
We've experienced periods of extraordinary growth over the last two years, Pichai wrote. "We hired for a different economic reality than the one we confront today in order to meet and fuel that development."
He said that the layoffs are a result of Google's "rigorous investigation" of its business practices.
According to Pichai, the positions being terminated "cut across Alphabet, product areas, functions, levels, and regions." He expressed his "deep regret" over the layoffs.
Regulatory records show how Google's staff increased throughout the epidemic, growing from 119,000 at the end of 2019 to roughly 187,000 by late last year.
Google, which was established some 25 years ago, was "bound to go through challenging economic cycles," according to Pichai.
These are crucial times to narrow our focus, redesign our cost structure, and allocate our resources to our top priorities, he added.
The letter from Pichai states that there would be layoffs in the United States and other unnamed nations.
According to Wedbush Securities analysts Dan Ives, Taz Koujalgi, and John Katsingris, "the clock has struck midnight on hyper growth and digital advertising headwinds are on the horizon," forcing the IT sector to halt hiring and make job cuts.
Microsoft has announced the elimination of 10,000 jobs, or approximately 5% of its workforce. Amazon announced this month that it would be eliminating 18,000 jobs, a small portion of its 1.5 million-person workforce, while commercial software provider Salesforce would be eliminating 8,000 jobs, or 10% of its staff. Facebook parent Meta stated last October that it will cut 11,000 jobs, or 13% of its workforce. Elon Musk cut back on employment at Twitter after buying the social media company last fall.
Smaller players are also being impacted by the job layoffs. Sophos, a cybersecurity company based in the UK, let go of 450 workers, or 10% of its whole workforce. In its second round of layoffs in less than a year, cryptocurrency trading platform Coinbase reduced 20% of its workforce, or around 950 employees, from the total.
The Wedbush analysts noted that in the present economic scenario, "the stage is being set: tech names across the board are slashing expenses to preserve margins and becoming leaner."
Despite indications that the economy is slowing down, employment in the United States has remained strong, and another 223,000 jobs were created in December. However, the tech industry expanded incredibly quickly over the past few years due to rising demand brought on by people starting to work remotely.
Many CEOs of businesses have been criticized for expanding too quickly, but even with the most recent round of layoffs, these businesses are still significantly bigger than they were before the pandemic's economic boom started.
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