Google, one of America’s Multinational Technology Companies and most frequently used search engines globally has reported laying off 12,000 workers, making up about 6% of its workforce.
Google has not only contributed to the number of tech companies that have laid of their staff early this year, 2023, but has also become the latest tech company to do so.
Many companies in the tech industry are seen to be trimming their human capital as the economic prosperity that the industry enjoyed during the COVID-19 pandemic recedes.
Sundar Pichai, Google’s CEO, who champions Alphabet, Google’s parent company, informed staff about the cuts in an email that was also posted on the company’s news blog at the Silicon Valley giant.
The company is experiencing its largest round of layoffs to date, adding to the tens of thousands of job cuts recently announced by tech companies such as Microsoft, Amazon, and Facebook parent Meta, as they adjust to a negative industry outlook.
In January 2023 alone, there have been 48,000 job cuts announced by major companies in the sector.
“Over the past two years, we’ve seen periods of dramatic growth.
“To match and fuel that growth, we hired for a different economic reality than the one we face today.”Sundar Pichai
According to the company’s CEO, the layoffs reflect a “rigorous review” conducted by the company of its operations.
The jobs being eliminated “cut across Alphabet, product areas, functions, levels and regions,” Pichai said, adding that he was “deeply sorry”.
“I take full responsibility for the decisions that led us here.”Sundar Pichai
Regulatory records show how Google’s workforce increased during the pandemic, swelling to nearly 187,000 people by late last year, 2022 from 119,000 at the end of 2019.
Explaining further the company’s decision, Pichai stated that due to Google’s longevity of nearly 25 years, it was “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.”Sundar Pichai
Pichai emphasized the potential growth in the field of artificial intelligence as an area for the company to focus on, while also announcing that there will be job cuts in both the U.S. and other unspecified countries, as per his letter.
A note by Victoria Scholar, an analyst with U.K.-based Interactive Investment read that, Tech companies that “not long ago were the darlings of the stock market” have been forced to halt hiring and cut jobs in preparation for an economic downturn.
“Digital spending is suffering, and ad revenues are falling with it.”Victoria Scholar
Recent Layoffs In the Industry
Just this week, Microsoft announced 10,000 job cuts, slashing nearly 5% of its workforce.
Prior that, Amazon announced cutting jobs by 18,000 this month, although that forms just a fraction of its 1.5 million strong workforce, whereas business software maker Salesforce also announced laying off about 8,000 employees, 10% of the total.
That not being enough, last fall saw Meta, the Parent company of Facebook announcing that it would shed 11,000 positions – 13% of its workers.
Following, Elon Musk slashed jobs at Twitter after he took over the social media company last fall.
Smaller players are not an exception as U.K.-based cybersecurity firm Sophos laid off 450 employees – 10% of its global workforce and Cryptocurrency trading platform Coinbase cut 20% of its workforce, summing to about 950 jobs, in its second round of layoffs in less than a year.
Despite signs of a slowing economy, by all this layoffs, employment in the U.S. seems resilient, with about 223,000 jobs added on in December.
With demand increasing, calling for employees working remotely, the tech sector grew exceptionally fast over the last several years.
CEOs of various companies have acknowledged expanding too quickly, however, after the latest round of layoffs, these companies remain significantly larger than they were prior to the economic growth during the pandemic.
John Blevins, an adjunct professor at Cornell University’s Business School, stated that although the job cuts in the tech industry are significant, their impact on overall tech industry employment is not as severe as it may appear.
“These workers who were laid off will readily get new jobs most likely at smaller tech companies.
“They’re coming with high credentials from these big firms. That knowledge will be transferred and will actually work to everyone’s benefit.”John Blevins
Both Sundar Pichai,Google CEO and Satya Nadella, Microsoft CEO, in their layoff announcements emphasized the need for capitalizing on their advances in artificial intelligence technology; reflecting renewed competition between the tech giants sparked by Microsoft’s growing partnership with the San Francisco startup OpenAI.