Google’s parent company will cut 12,000 jobs worldwide as it becomes the latest major US tech company to cut its workforce after a pandemic-related hiring boom.
Alphabet chief executive Sundar Pichai said the layoffs followed a “rigorous review” of the business. The cuts come days after Microsoft said it would cut 10,000 jobs, citing a change in digital spending habits and a weak global economy.
Pichai announced the layoffs, which affect around 6% of Alphabet’s 187,000 employees, in an email to Google staff. Echoing recent remarks from the company’s US peers, he noted that the business had expanded too much during the height of the pandemic, when demand for digital products and services skyrocketed.
“Over the past two years we have seen periods of spectacular growth. To match and fuel that growth, we contracted for a different economic reality than the one we face today,” he wrote.
Pichai said the reductions would “cut across Alphabet, product areas, features, tiers and regions.” The company also owns, under the Google umbrella, YouTube and the Android mobile operating system.
Alphabet had already alerted investors to a slowdown in its core business of search advertising, where companies pay to appear in users’ search results. Last year it reported search revenue of $39.5bn (£32bn) for the third quarter, a 4% growth rate that fell short of market expectations.
Other job cuts in the US tech industry in recent months include 18,000 layoffs at Amazon, 11,000 at Facebook owner Meta, and 8,000 at commercial software company Salesforce.
Amazon CEO Andrew Jassy said the company had “hired quickly in recent years” when it announced the layoffs. Meta CEO and founder Mark Zuckerberg said expectations that the pandemic would lead to a sustained increase in revenue “didn’t play out as he expected.” The co-CEO of software firm Salesforce, Marc Benioff, said this month: “We hired too many people which led to this economic downturn that we are now facing.”
Tech companies laid off more than 150,000 workers worldwide last year, according to the website. Layoffs.for your informationwith another 38,800 layoffs already announced in 2023.
Dan Ives, an analyst at US financial services firm Wedbush Securities, said the widespread job cuts reflected previously thriving technology companies responding to a much tougher global economic environment.
“We are seeing 5-10% downsizing in the technology sector as many of these companies (both large and small) used to spend money like 80s rock stars and now need to rein in spending controls sooner. of a softer macro”, he said. saying.
Pichai said in his statement that Google was well prepared to take advantage of advances in artificial intelligence. “We have a substantial opportunity in front of us with AI in all of our products and we are prepared to boldly and responsibly address it,” he wrote. Alphabet’s units include British artificial intelligence subsidiary DeepMind.
