Google parent company Alphabet Inc is the latest to join the mass-lay offs in the tech industry.
Alphabet CEO Sundar Pichai this week said in a staff memo that the company would be scaling back after rapidly increasing the headcount over the last few years ‘for a different economic reality than the one we face today.’
The layoffs will be affecting employees globally, though starting with US staff, and will affect recruiting, corporate functions, engineering, and products teams. Alphabet has already contacted the US staff affected and will be providing 16 weeks of severance, paying them their 2022 bonuses and remaining vacation days, and six months' worth of health benefits.
In October 2022, the company reported that profits had declined by 27 percent to $13.9bn, compared to the prior year. At the time, Pichai announced that the company would be reducing its expenses.
In November 2022 TCI Fund Management, which holds a $6 billion stake in Alphabet, firmly recommended that the internet search giant publicly set a target for profit margins, increase share buybacks and reduce losses in its portfolio of Other Bets, Alphabet’s venture capital and private equity division.
Pichai said in the memo that despite layoffs, he is “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." The company has been investing in ‘generative artificial intelligence (AI)’, or AI that can create novel content instead of just analyzing or acting on existing data. This is an area that already sees significant competition from other tech giants, including Microsoft.
Other Alphabet subsidiaries have announced job cuts in 2023. Verily, Alphabet's health-focused company laid off ~200 employees, and its robotics subsidiary Intrinsic was required to reduce its team by 40 employees.
Google is by no means the first company to be going through a round of massive layoffs. In November 2022, Amazon began laying off AWS contractors, cloud gaming staff, human resources teams, and those working on Alexa, totaling around 10,000 employees. That same month saw Meta announce its plans to cut thousands of employees, as well as Salesforce ‘quietly’ laying off hundreds of workers.
Most recently, Microsoft announced two days ago that it, too, would be laying off around 11,000 staff, including in the engineering departments.