Google-parent Alphabet slashes headcount by 12,000

Google said Friday it will lay off 12,000 people from its workforce, adding to the slew of major U.S. tech companies cutting jobs amid fears of an oncoming recession.

Sundar Pichai, the CEO of Google and parent company Alphabet, said in an email sent to the company’s staff Friday that the firm will begin making layoffs in the U.S. immediately. In other countries, the process “will take longer due to local laws and practices,” he said. CNBC reported in November that Google employees had been fearing layoffs as its counterparts made cuts and as employees saw changes to the company’s performance ratings system.

The web search and video sharing giant will offer U.S.-based employees 16 weeks of severance pay plus two weeks for each additional year they’ve worked at Google, Pichai added.

Google shares closed up more than 5% after the news.

Tech companies are facing a variety of challenges at the moment, not least rising interest rates and inflation over the past year that have clobbered technology shares and forced advertisers to cut back on online ad spending.

Hikes to interest rates from the U.S. Federal Reserve in particular have led to souring appetite for American tech shares. The gloomy macroeconomic climate has in turn piled pressure on those companies to make deep cuts to their workforces.

LOS ANGELES, CALIFORNIA - JUNE 09: Google CEO Sundar Pichai speaks at a panel at the CEO Summit of the Americas hosted by the U.S. Chamber of Commerce on June 09, 2022 in Los Angeles, California. The CEO Summit entered its second day of events with a formal signing for the "International Coalition to Connect Marine Protected Areas" and a speech from U.S. President Joe Biden. (Photo by Anna Moneymaker/Getty Images)
LOS ANGELES, CALIFORNIA – JUNE 09: Google CEO Sundar Pichai speaks at a panel at the CEO Summit of the Americas hosted by the U.S. Chamber of Commerce on June 09, 2022 in Los Angeles, California. The CEO Summit entered its second day of events with a formal signing for the “International Coalition to Connect Marine Protected Areas” and a speech from U.S. President Joe Biden. (Photo by Anna Moneymaker/Getty Images)
Anna Moneymaker | Getty Images News | Getty Images

On Wednesday, Amazon began a fresh wave of job cuts affecting more than 18,000 people. That same day, Microsoft announced plans to lay off 10,000 workers.

Twitter, under the leadership of Elon Musk, has also made redundancies, slashing over half of the company’s headcount since taking over as CEO in October.

The layoff move from Google on Friday comes after CNBC reported Thursday that the firm was deferring a portion of employees’ year-end bonus checks until March or April instead of paying them in full in January.

Read the full memo Pichai sent out to staff on Friday:

Googlers,

I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles. We’ve already sent a separate email to employees in the US who are affected. In other countries, this process will take longer due to local laws and practices.

This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that. The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here.

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.

I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI. To fully capture it, we’ll need to make tough choices. So, we’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.

To the Googlers who are leaving us: Thank you for working so hard to help people and businesses everywhere. Your contributions have been invaluable and we are grateful for them.

While this transition won’t be easy, we’re going to support employees as they look for their next opportunity.

In the US:

  • We’ll pay employees during the full notification period (minimum 60 days).
  • We’ll also offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
  • We’ll pay 2022 bonuses and remaining vacation time.
  • We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
  • Outside the US, we’ll support employees in line with local practices.

As an almost 25-year-old company, we’re 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.

Being constrained in some areas allows us to bet big on others. Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.

Thanks to those early investments, Google’s products are better than ever. And we’re getting ready to share some entirely new experiences for users, developers and businesses, too. We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly.

All this work is a continuation of the “healthy disregard for the impossible” that’s been core to our culture from the beginning. When I look around Google today, I see that same spirit and energy driving our efforts. That’s why I remain optimistic about our ability to deliver on our mission, even on our toughest days. Today is certainly one of them.

I’m sure you have many questions about how we’ll move forward. We’ll be organizing a town hall on Monday. Check your calendar for details. 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.

-Sundar

The post Google to lay off 12,000 people — read the memo CEO Sundar Pichai sent to staff first appeared on cnbc.com

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