Google is laying off 12,000 employees, becoming the latest tech company to cut staff after rapid expansion slowed during the COVID-19 pandemic.
Alphabet CEO Sundar Pichai shared the news in an email to employees at the Silicon Valley giant on Friday, which was also published on the company’s news blog.
“In the last two years we have experienced periods of dramatic growth,” Pichai wrote. “To accommodate and drive that growth, we hired for a different economic reality than the one we face today.”
He said the layoffs reflect a “rigorous review” Google has conducted of its operations. The positions being eliminated “run across Alphabet, product areas, functions, tiers and regions,” Pichai said.
The cuts will affect just over 6% of Alphabet’s workforce, which was 186,000 as of September, according to a securities filing. Like numerous other big tech companies, Alphabet has hired thousands of employees during the pandemic and is now trying to cut costs in the run-up to a possible economic recession later this year.
Laid-off employees in the US will receive a severance package starting at 16 weeks’ salary plus two weeks for each additional year at Google, as well as six months of health care, job placement and immigration assistance.
Pichai added, “As a nearly 25-year-old company, we are bound to go through tough economic cycles. These are important moments to sharpen our focus, reshape our cost base, and direct our talent and capital toward our highest priorities. “
Microsoft joins list of tech companies to announce sweeping layoffs 05:10
Earlier this week, Microsoft announced it would cut 10,000 jobs, or almost 5% of its workforce. Also in January, Amazon announced 18,000 job cuts, Facebook parent company Meta announced 11,000 job cuts and software maker Salesforce said it would lay off 7,000 employees. Netflix, Peloton, Twitter, and other industry players have also announced large-scale layoffs or scaled back hiring in recent months.
“All the tech giants have now entered the layoff game,” Wall Street analyst Adam Crisafulli of Vital Knowledge said in a report, adding that “countless others are also cutting jobs.”
The job cuts also affect smaller players. British cybersecurity company Sophos laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase shed 20% of its workforce, about 950 jobs, in its second round of layoffs in less than a year.
According to Challenger, Gray & Christmas, the tech industry shed the most jobs of any industry over the past year and will shed nearly 100,000 jobs in 2022 after expanding rapidly during the pandemic.
“We’re seeing 5% to 10% job cuts across the tech sector as many of these companies (both big and small) spent like 1980s rock stars and are now having to rein in cost controls ahead of a softer macro,” Wedbush told the securities analyst Dan Ives in a research note.
Economic growth has slowed as the US Federal Reserve raises interest rates sharply to curb inflation. Although experts are forecasting a slowdown in the job market for this year, the hiring situation in the US has remained robust. The country’s unemployment rate fell to 3.5% in December, hitting a 50-year low.