Google cuts 12,000 jobs as tech woes bite again

Google's parent company Alphabet announced Friday it will cut about 12,000 jobs globally, citing a changing economic reality as it became the latest US tech giant to enact large-scale restructuring.

The layoffs come a day after Microsoft said it would reduce staff numbers by 10,000 in the coming months, following similar cuts by Facebook owner Meta, Amazon and Twitter as the tech sector girds for economic downturn.

The cuts follow a major hiring spree during the height of the coronavirus pandemic when companies scrambled to meet demand as people went online for work, school and entertainment.

"Over the past two years we've seen periods of dramatic growth," Alphabet CEO Sundar Pichai said in an email to employees.

"To match and fuel that growth, we hired for a different economic reality than the one we face today."

A review is taking place to make sure that people and their roles are in line with the company's priorities, Pichai said, adding that the workforce would be reduced by around 12,000 positions.

Alphabet employed nearly 187,000 workers worldwide at the end of September 2022. The cuts represent a little over 6 percent of its total workforce.

The cuts will be "across departments, functions, levels of responsibility and regions," Pichai added.

"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."

- 'Unsustainable' -

Pichai said that the cuts would "sharpen our focus" on priorities including artificial intelligence.

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

Google's world-dominating search engine has found itself under pressure with the emergence of ChatGPT, a Microsoft-backed chatbot that can generate elaborate, human-like content in just seconds.

Microsoft has said the technology will be used to strengthen Bing, the longtime rival to Google search.

Google has turned to founders Larry Page and Sergey Brin, who have left their daily roles at the tech titan, for help responding to the threat posed by the chatbot, according to a New York Times report.

Brin and Page met with Google executives several times last month to brainstorm, the Times reported.

Google declined to comment directly on the Times report.

"We have long been focused on developing and deploying AI to improve people's lives," said Google spokesperson Lily Lin.

"We continue to test our AI technology internally to make sure it's helpful and safe, and we look forward to sharing more experiences externally soon."

Pichai announced severance packages for US employees, who will receive at least 16 weeks of salary, their 2022 bonus, paid vacations and six months of health coverage.

He said he remained "optimistic about our ability to deliver on our mission, even on our toughest days."

Wall Street welcomed the cuts: Alphabet shares ended the formal trading day up more than 5 percent to $98.02.

This tracked the effect of job cuts on other tech giants, with Meta's share price up 35 percent since it announced 11,000 job cuts on November 9 and Amazon's stock was up 13 percent since 18,000 people were let go earlier this month.

Analysts have said tech's big guns had previously overspent, not seeing a slowdown on the horizon.

Daniel Ives of Wedbush Securities said the layoffs highlight a long period of irresponsible spending across a sector basking in "hypergrowth."

"The reality is tech stalwarts overhired at a pace that was unsustainable and now darker macro is forcing these layoffs across the tech space," he said.

According to tech site Layoffs.fyi, nearly 194,000 industry employees have lost their jobs in the US since the beginning of 2022, not including those announced by Alphabet on Friday.

Big Tech's job-slashing wave
Paris (AFP) Jan 20, 2023 - Google's announcement Friday it would slash nearly 12,000 jobs worldwide is the latest in a series of mass layoffs in the once-unassailable tech sector, which is facing a huge downturn.

Here are the others:

- Amazon -

The online retail giant said on January 5 it would cut more than 18,000 jobs from its workforce, citing "the uncertain economy" and the fact it had "hired rapidly" during the pandemic.

During Covid, Amazon had gone on a hiring spree to meet an explosion in demand for deliveries, doubling its global staff between the beginning of 2020 and start of 2022.

It was the largest among the recent workforce reductions in the US tech sector and the biggest for the Seattle-based company.

At the end of September, the group had 1.54 million employees worldwide.

- Meta -

In what Mark Zuckerberg called "the most difficult changes we've made in Meta's history," the CEO of the company that owns Facebook, Instagram and WhatsApp announced in November a cut of 11,000 jobs, or some 13 percent of staff.

Zuckerberg told his 87,000-strong employees he had expected the boost in e-commerce and online activity during the pandemic to continue, but admitted he had been wrong.

Meta's poor performance in 2022 sent its share price plummeting, as well as a sharp drop in sales and stagnation in its user numbers.

- Microsoft -

On January 18, Microsoft announced it would lay off 10,000 employees in the coming months.

The cuts were "in response to macroeconomic conditions and changing customer priorities," the maker of the Windows operating system said in a US regulatory filing.

The plan followed two smaller rounds of layoffs in 2022, one in July affecting less than one percent of the workforce and a second in October targeting under 1,000 people.

Microsoft, which went on a major hiring spree during the pandemic to meet a surge in demand for its software and cloud computing services, currently has 221,000 employees, including 122,000 in the United States, according to its website.

- Twitter -

Just a week after his blockbuster takeover, Elon Musk sacked half of Twitter's 7,500-strong staff in November as part of his major overhaul of the troubled company.

Workers around the world were shown the door and took to Twitter to vent their frustration or disbelief and say good-bye to one of Silicon Valley's most iconic companies.

The cull is part of Musk's push to find ways to pay for the mammoth $44 billion deal for which he took on billions of dollars in debt.

- Snap -

At the end of August, Snapchat's parent company Snap let go about 20 percent of its employees, around 1,200 people, in a bid by the photo-centric messaging app to dig itself out amid competition and revenue woes.

While its user numbers continue to grow -- 363 million daily users in October -- it is saddled by diminishing profits and competition from other apps, such as TikTok.

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