Google’s parent company Alphabet Inc. said it will cut about 12,000 jobs, more than 6 percent of its global workforce, becoming the latest tech giant to downsize after years of lush growth and job hiring.
The cuts will impact jobs globally and across the company, Chief Executive Officer Sundar Pichai told employees in an email on Friday, writing that he “takes full responsibility for the decisions that brought us here.”
With the layoffs, Google joins a host of other tech giants that have drastically scaled back operations amid a faltering global economy and rising inflation. Meta Platforms Inc., Twitter Inc., and Amazon.com Inc. have all trimmed their ranks. Thanks to a resilient search business, Google has been one of the tech holdouts longest staving off major downsizing. But the company is grappling with a slowdown in digital advertising, and its cloud computing division continues to lag Amazon and Microsoft Corp.
“These are important moments to sharpen our focus, reshape our cost base, and direct our talent and capital toward our highest priorities,” Pichai wrote in the email.
He said the company has a “significant opportunity ahead” with artificial intelligence, a key investment area in which Google has faced increased competition recently.
In October, the company reported earnings and sales that fell short of analysts’ expectations. Profits fell 27 percent year-on-year to $13.9 billion. At the time, Pichai said Google would be cutting spending, and CFO Ruth Porat said new jobs would fall by more than half in the fourth quarter from the prior period.
Google’s job cuts follow investor pressure for a more aggressive strategy to contain spending. In November, TCI Fund Management Ltd. In an open letter, the internet search giant called on the company to publicly set a target for profit margins, increase share buybacks and cut losses on its portfolio of Other Bets, Alphabet’s Moonshot division. “The company has too many employees and the cost per employee is too high,” said TCI CEO Chris Hohn, noting that Alphabet’s headcount has grown 20 percent a year since 2017.
According to executive search firm Challenger, Gray & Christmas Inc., the largest job cuts in 2022 were in the technology sector, with 97,171 for the year, up 649 percent year-over-year.
Google has taken a number of cost-cutting measures in recent months, discontinued the next generation of its Pixelbook laptop and permanently shut down Stadia, its cloud gaming service. In early January, Verily, a biotech unit of Alphabet, announced that it was shedding 15 percent of its workforce.
Pichai said Alphabet would pay affected employees in the US 16 weeks of severance pay and six months’ worth of healthcare benefits, while other regions would receive packages based on local laws and practices.
