As the global economic outlook weakens, the latest major US technology company has announced significant job cuts.
Following a surge in hiring during the pandemic, Google’s parent company, Alphabet, has announced its plans to reduce its workforce by 12,000 employees globally. Sundar Pichai, Alphabet’s CEO, stated that the decision came after a thorough assessment of the business. This move comes shortly after Microsoft’s announcement that it will be cutting 10,000 jobs due to changing digital spending patterns and economic instability.
In an email addressed to Google employees, Pichai disclosed that around 6% of Alphabet’s workforce, which amounts to approximately 12,000 jobs, will be made redundant. He highlighted that the company, like other major US tech firms, had expanded excessively during the peak of the pandemic when there was a surge in demand for digital services and products.
Pichai explained that the job cuts would be spread throughout Alphabet, impacting various product areas, functions, levels, and regions. It’s worth noting that Alphabet also owns YouTube and the Android mobile operating system under the Google umbrella.
Alphabet had previously informed investors of a slowdown in its core search advertising business, where companies pay to have their ads appear in search results. In the third quarter of last year, the company reported search revenues of $39.5 billion (£32 billion), with a growth rate of 4%, which failed to meet market expectations.
There have been several other recent instances of job cuts within the US tech industry, including 18,000 redundancies at Amazon, 11,000 at Meta (Facebook’s parent company), and 8,000 at the business software company Salesforce.
Announcing the redundancies, Amazon’s CEO Andrew Jassy stated that the company had been on a rapid hiring spree over the past few years. Meta’s CEO and founder Mark Zuckerberg acknowledged that his expectations of a sustained increase in revenue due to the pandemic did not materialize. Salesforce’s co-CEO Marc Benioff admitted that his company had hired excessively before the current economic downturn. Last year, tech companies globally laid off over 150,000 employees, with an additional 38,800 layoffs already announced in 2023, according to Layoffs.fyi. Dan Ives, an analyst at Wedbush Securities, observed that these job cuts were a response by previously prosperous tech firms to a more challenging global economic environment.
According to an individual, there have been reductions of 5%-10% in the workforce throughout the technology industry as a result of many companies, regardless of size, having spent extravagantly, resembling rock stars from the 1980s. With a softer macroeconomic environment ahead, they now need to tighten their expenses. Pichai’s statement highlights that Google is fully equipped to capitalize on advancements in artificial intelligence. He expressed confidence in their ability to approach the topic boldly and responsibly, stating that they have a significant opportunity with AI across their products. Alphabet’s subsidiaries include the British-based AI company DeepMind.
