Google dumps 12,000 employees after project probe

You can work from home today – to process the news

Google is to lay off 12,000 employees amid something of a pandemic reckoning for technology companies that recruited heavily in recent years and are now facing harsh realities of a cooling economy.

In an email sent to employees today, Sundar Pichai, CEO of Google and its parent Alphabet, said: “Over the past two years we’ve seen periods of dramatic growth. To match this and fuel that growth, we hired for a different economic reality than the one we face today.”

In calendar Q1 of 2020, Google employed a little more than 120,000 personnel but that had jumped to 186,779 by the end of September last year. One large institutional investor has already agitated for change, calling on Google to cut costs, pay staff less and review its portfolio.

Pichai confirmed today: “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.”

The evaluation began last year after Google reported a massive calendar Q3 slowdown in revenue growth, up just 6 percent to $69.1 billion, and a 9 percent drop in operating profit to $17.135 billion. At the time, Google said it was reviewing every project underway.

Simplicity Sprint was launched last summer as a way to up productivity of employees by 20 percent, and Google has also implored workers to restrict their expenses, including travel.

Pichai revealed in the staff memo that it will pay employee the full notice period (min 60 days), a severance package starting at 16 weeks, will pay 2022 bonuses and holiday leave, and will offer half a year of healthcare benefits.

"As an almost 25-year-old-company, we're bound to go through difficult economic cycles," the CEO said. "These are important moments to sharpen our focus, engineer our cost base, and direct our talents and capital to our highest priorities.

"Being constrained in some areas allows us to bet big on others," he added.

Google isn't alone, far from it. Amazon is axing 18,000 staff, Microsoft yesterday confirmed it is making 10,000 redundant and Salesforce at the beginning of the month said it was expunging 10 percent or 7,300 roles. And others are also making moves.

Pichai told staff there'll be a town hall on Monday where they can ask questions. "Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your working day, please feel free to work from home today." ®

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