California: Google is laying off 12,000 employees, or about 6% of its workforce, becoming the latest tech company to trim staff as the economic boom the industry rode during the COVID-19 pandemic.
Google CEO Sundar Pichai, who also leads its parent company Alphabet, informed the Silicon Valley giant’s employees about the cuts on Friday in an email that was also posted on the company’s news blog. It’s one of the company’s biggest rounds of layoffs ever and adds to thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent Meta and other tech companies as they ramp up their operations amid a bleak outlook for the industry. This month, at least 48,000 job cuts have been announced by major companies in the sector.
“Over the past two years we’ve seen periods of dramatic growth,” Pichai wrote. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”
He said the layoffs reflect a “rigorous review” carried out by Google of its operations.
The jobs being eliminated “cut across Alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” for the layoffs.
Regulatory filings illustrate how Google’s workforce swelled during the pandemic, ballooning to nearly 187,000 people by late last year from 119,000 at the end of 2019.
Pichai said that Google, founded nearly a quarter of a century ago, was “bound to go through difficult economic cycles.”
“These are important moments to sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities,” he wrote. He called out the company’s investments in artificial intelligence as an area of opportunity.
There will be job cuts in the U.S. and other unspecified countries, according to Pichai’s letter.
The tech industry has been forced to freeze hiring and cut jobs “as the clock has struck midnight on hyper-growth and digital advertising headwinds are on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi, and John Katsingris wrote Friday.
Just this week, Microsoft announced 10,000 job cuts or nearly 5% of its workforce. Amazon said this month it is cutting 18,000 jobs, although that’s a fraction of its 1.5 million strong workforces, while business software maker Salesforce is laying off about 8,000 employees, or 10% of the total. Last fall Facebook parent Meta announced it would shed 11,000 positions or 13% of its workers. Elon Musk slashed jobs at Twitter after he acquired the social media company last fall.
Those job cuts are hitting smaller players as well. U.K.-based cybersecurity firm Sophos laid off 450 employees or 10% of its global workforce. Cryptocurrency trading platform Coinbase cut 20% of its workforce, about 950 jobs, in its second round of layoffs in less than a year.
“The stage is being set: tech names across the board are cutting costs to preserve margins and get leaner” in the current economic climate, the Wedbush analysts said.
US employment has been resilient despite signs of a slowing economy, and 223,000 more jobs were added in December. Yet the technology sector has grown at an exceptionally fast pace over the past several years as employees have turned to work remotely. Many CEOs have taken the blame for growing too fast, yet those same companies, even after the latest round of job cuts, are much bigger than they were before the pandemic triggered the economic boom.
In their layoff announcements, both Pichai and Microsoft CEO Satya Nadella stressed the importance of capitalizing on their advances in artificial intelligence technology, which has renewed interest among the tech giants due to Microsoft’s growing partnership with San Francisco startup OpenAI.