In a note to its employees Google CEO Sundar Pichai has said the company is cutting about 12,000 jobs as it faces “a different economic reality”.
The job cuts affect 6% of its workforce, and follows thousands of layoffs at tech giants who are downsizing after a pandemic-led hiring spree.
The IT sector is beleaguered by several challenges, such as rising interest rates and inflation over the past year that have impacted technology shares and forced advertisers to cut back on online ad spending.
This bleak macroeconomic climate has put pressure on tech cos to make deep cuts to their workforces.
More questions than answers
The latest move comes after reports said the firm was deferring a portion of employees’ year-end bonus checks until March or April instead of paying them in full in January.
While employees had been bracing for a potential layoff, they are seeking answers as to what the criteria for layoffs, which surprised some employees who woke up to find their access to company properties cut off, are.
There is confusion and distress since some of those booted had been long-tenured or recently promoted.
The note further read that the layoffs will begin in the U.S. immediately, whereas in other countries the process “will take longer due to local laws and practices.”
It will offer U.S.-based employees 16 weeks of severance pay plus two weeks for each additional year they’ve worked at Google, Pichai added.
Employees in Asia will learn starting in February if the reduction impacts them.
The job losses affect teams across the company including recruiting and some corporate functions, as well as some engineering and products teams.
Focus on AI
Google and Microsoft have been investing in AI big time, more specifically generative AI.
Pichai wrote, “I am 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.”
He further commented, “we’re getting ready to share some entirely new experiences for users, developers and businesses, too. We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly.”
Following other major firms
Google is just the latest to join the string of high profile companies announcing mass layoffs.
On Wednesday, Amazon began a fresh wave of job cuts affecting more than 18,000 people.
That same day, Microsoft announced plans to lay off 10,000 workers.
Twitter cut over half of the company’s headcount since Elon Musk took over.
For US employees the following will be provided, as the note reads:
- We’ll pay employees during the full notification period (minimum 60 days).
- We’ll also offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
- We’ll pay 2022 bonuses and remaining vacation time.
- We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
- Outside the US, we’ll support employees in line with local practices.
To organise Q/A event
The note concluded that questions regarding the latest developments will be addressed at a “town hall on Monday”.
He then allowed those who have to “absorb this difficult news” to “feel free to work from home today”.