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January 20, 2023

Google layoffs will see 12,000 staff made redundant in latest Big Tech jobs blow

Having recruited heavily during the pandemic, Google now has to adjust to a 'new economic reality', its CEO said.

By Matthew Gooding

Google’s parent company Alphabet is making 12,000 staff, some 6% of its global workforce, redundant. CEO Sundar Pichai said the company is facing up to “a different economic reality” after hiring extensively during the Covid-19 pandemic. It is the latest Big Tech company to announce job cuts in response to the global economic slowdown.

CEO of Alphabet and Google Sundar Pichai announced sweeping job cuts today. (Photo by Mateusz Wlodarczyk/NurPhoto via Getty Images)

Pichai confirmed the job cuts in a memo to staff today. The cuts will be made in the company’s teams around the world.

Google layoffs: economic reality bites

“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,” Pichai said.

“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. To fully capture it, we’ll need to make tough choices. So, 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. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.”

Having seen revenues rise sharply during the pandemic, the past year has been more difficult for Google, with income remaining largely static. Its latest quarterly earnings update, for the three months to the end of September 2022, showed revenue of $69bn, down slightly from $69.6bn the previous quarter. This has led to pressure from shareholders to make changes, and last year activist investor TCI Fund Management called on Alphabet to cut costs.

Today’s news “will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with,” Pichai said. “I’m deeply sorry for that. 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.”

Big Tech job cuts continue

Google joins many of tech’s biggest names in cutting back staff numbers as they combat high inflation and slowing growth in markets around the world, caused by a number of factors including the end of the pandemic and the continuing war in Ukraine.

Earlier this week Microsoft revealed it was making 10,000 staff redundant, saying customers were cutting digital spending. CEO Satya Nadella explained: “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less,” Nadella wrote. “We’re also seeing organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one."

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Since the turn of the year, Salesforce has also confirmed it is letting 7,000 staff go, while the final months of 2022 saw the likes of Amazon, Meta and Twitter cut thousands of jobs.

Read more: UK start-up jobs are disappearing fast - except in cleantech

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