New York
CNN
–
Alphabet, the parent company of Google, said it is cutting about 12,000 jobs, or 6% of its workforce, in the latest cuts to shake up the technology sector.
The cuts will affect roles across product regions and regions, CEO Sundar Pichai said in an email to employees posted to the company’s website on Friday.
Affected US employees will remain on the company’s payroll for 60 days and receive at least 16 weeks of severance pay, in addition to other benefits.
Alphabet has successfully grown its workforce by more than 50,000 employees over the past two years as it is in high demand Services during the pandemic have boosted profits. But in recent quarters, the company’s core digital ad business has slowed as downturn and recession fears cause advertisers to cut back on their spending.
“Over the past two years, we have seen periods of explosive growth,” Pichai said in the email. “To keep pace with and support this growth, we have set an economic reality different from the one we face today.”
Pichai said the layoffs were part of an effort to refocus on the company’s core business, as well as its early investments in artificial intelligence. “These are key moments for sharpening our focus, re-engineering our cost base, and directing our talent and capital toward our highest priorities,” he said.
Alphabet is set to report earnings for the three months through December 30 in early February, and Wall Street analysts expect the company’s revenue to grow just 1.7% over the same period a year earlier. That would be a sharp slowdown from the 32% growth it posted at the same time last year. Analysts also expect net income to decline by approximately 25% year-over-year.
The Google job cuts are just the latest in a disastrous wave of layoffs in tech, as inflation weighs on consumer spending and rising interest rates squeeze financing. Demand for digital services has also waned during the pandemic as people return to their offline lives.
Microsoft
(MSFT) On Wednesday, it said it would cut 10,000 employees. Amazon
(AMZN) It also recently announced that it will be laying off 18,000 people, Salesforce
(CRM) Cuts 10% of its employees and Facebook
(FB)– Guardian Meta announced the reduction of 11,000 jobs. (Apple is the rare Big Tech company that hasn’t announced a slew of layoffs in recent months.)
On Friday, Wayfair He said It will cut approximately 1,750 employees, at Second round Layoffs in less than six months.
CTOs from Meta Mark Zuckerberg to Salesforce’s Marc Benioff blamed themselves for overhiring early in the pandemic and misread how to quell a surge in demand for their products once Covid-19 restrictions eased. Pichai also blamed it on Friday For Alphabet discounts.
“The fact that these changes will affect the lives of Google employees weighs heavily on me, and I take full responsibility for the decisions that have led us here,” Pichai said. But, he added, “I am confident of the tremendous opportunity that lies ahead.”
Job growth has slowed in recent months and layoffs – especially from technology companies – have become more prevalent. But Robert Fricke, corporate economist at the Navy Federal Credit Union, told CNN on Thursday that doesn’t necessarily mean an increase in unemployment. The number of first-time unemployment insurance claims fell to 190,000 for the week ending Jan. 14, the lowest total in 15 weeks, according to Labor Department data.
While layoffs from high-profile companies have made headlines, many companies are desperate for more workers, especially those in technology. These workers are in great demand from the auto industry to the Department of Veterans Affairs to nonprofits.
“The job market remains so tight that many tech workers, and workers with other skills, are being snapped up well before they need to collect an unemployment check. They are likely to be snapped up by smaller firms, which have a much greater demand for workers than big companies,” Frick added.
— Alicia Wallace contributed to this article.