Google is set to cut its workforce by 12,000 roles as it aims to rein in costs and adjust to the economy.
Employees were sent an email on 20 January from CEO Sundar Pichai breaking the news.
The CEO said that during the past two years, Google has experienced “dramatic growth,” but ultimately the company “hired for a different economic reality than the one [it faces] today".
Roles set to be eliminated will affect all of Alphabet, including product areas, functions, levels, and regions, said Pichai.
To determine which roles to cut, the company carried out a review to “ensure that our people and roles are aligned with our highest priorities as a company".
“This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that,” said Pichai. “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.”
Google is set to support employees as they look for a new job. For workers in the US, it plans to:
- Pay employees during the full notification period, or notice period, of which the minimum is 60 days
- Offer a severance package consisting of 16 weeks' salary as well as two weeks for each additional year workers have been at the company
- Pay 2022 bonuses and any holiday time that is unused
- Offer six months of healthcare, job placement services, and immigration support
For the rest of the world, Google plans to support employees "in line with local practices". Workers in the US who have been affected already received an email about the news, while those in other countries will have to wait as the company navigates local laws and practices, said Pichai.
IT Pro has contacted the company to see how many UK employees are affected and what kind of support they will receive.
“As an almost 25-year-old company, we’re bound to go through difficult economic cycles,” said Pichai. “These are important moments to sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities.”
The company is organising a town hall on Monday, 23 January, where it will share with employees how it intends to move forward.
“Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today,” said Pichai.
Google has already had to defer paying employee bonuses from January to March, according to a report from CNBC.
Workers usually received their full bonus in January, but will now only pay 80% of the bonus at the start of the year as an advance, with the rest being paid in March or April.
Reportedly, the reason for the change was due to Google adjusting its employee evaluation system, and it's aiming to make bonus payments in March permanent beginning next year.
Microsoft to let go 10,000 employees
Fellow tech giant Microsoft revealed on 18 January it was set to reduce its overall workforce by 10,000 jobs, continuing the array of high-profile companies being forced to downsize their workforces.
CEO Satya Nadella said that this figure represented less than 5% of its total employee base.
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“It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas,” said Nadella. “We know this is a challenging time for each person impacted.”
Nadella revealed that the company is set to be hit with a $1.2 billion (£971.1 million) charge in its second financial quarter, due to severance costs, changes to its hardware portfolio, and “the cost of lease consolidation as we create higher density across our workspaces".
The CEO also said that employees who have lost their jobs will receive benefits like severance pay, healthcare coverage for six months, and career transition services.
“As a company, our success must be aligned to the world’s success. That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from,” said Nadella.
“If we deliver on this, we will emerge stronger and thrive long into the future; it’s as simple as that.”
