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Google announces 12,000 job cuts as tech industry layoffs spread

Firings come day after Microsoft says it will reduce staff in next few months, similar decisions by other prominent firms, as sector faces economic downturn

Workers help set up the Google booth at the Las Vegas Convention Center before the start of the CES tech show, January 2, 2023, in Las Vegas. (AP/John Locher)
Workers help set up the Google booth at the Las Vegas Convention Center before the start of the CES tech show, January 2, 2023, in Las Vegas. (AP/John Locher)

NEW YORK — Google’s parent company Alphabet announced about 12,000 job cuts globally on Friday citing a changing “economic reality,” becoming 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 previously unassailable tech sector battles a major economic downturn.

“Over the past two years, we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” Alphabet CEO Sundar Pichai said in an email to employees.

“We’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company,” Pichai said, adding that the workforce would be reduced by around 12,000 roles.

“The roles we’re eliminating reflect the outcome of that review.”

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.

Google CEO Sundar Pichai speaks during a visit to El Centro College in Dallas, Texas, October 3, 2019. (AP Photo/LM Otero, File)

Pichai said American employees have already been notified about the cuts while reductions in other countries will take longer due to local labor laws.

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 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 rose by 3.5 percent in electronic trading before the stock market opened.

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 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.

A Google office building at the company’s campus in Silicon Valley, June 2019. (Sundry Photography via iStock by Getty Images)

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.

Hewlett Packard and cloud computing giant Salesforce also announced major cuts this month as rampant inflation and rising interest rates have slowed growth.

US tech giants have also been facing scrutiny in the European Union, which has started enforcing regulations to stop them from avoiding tax, stifling competition, profiting from news content without paying, and serving as platforms for disinformation and hate.

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