Alphabet, parent holding company of Google, has announced that it’s cutting around 6% of its global workforce.
In an open letter published by Google and Alphabet CEO Sundar Pichai, the narrative followed a similar trajectory to that of other companies that have downsized in recent months, noting that the company had “hired for a different economic reality” than what it’s up against today.
Put simply, it had bolstered its workforce during the pandemic-driven digital boom times, but it’s now having to reverse course as the world curtails its spending in the face of economic headwinds.
“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 wrote, adding that the layoffs will impact units across Alphabet, not just Google, and that all regions and product areas will be affected.
Big Tech’s big layoffs
The news means that four out of the five so-called “big tech” firms have now announced significant redundancies in the past few months, with Apple the only one of the big-five U.S. tech giant not to announce layoffs as of yet.
Indeed, earlier this week, Microsoft announced 10,000 job cuts, affecting nearly 5% of its workforce, which followed Amazon’s move to cut 18,000 jobs, or 1.2% of its global headcount. Facebook’s parent Meta, meanwhile, revealed 11,000 layoffs back in November, hitting 13% of its workforce.
Other tech giants to announce significant layoffs in recent times include enterprise software giant Salesforce, which confirmed that it was cutting 10% of its workforce at the turn of the year, impacting more than 7,000 employees.
It’s worth noting that Alphabet hasn’t been impervious to downsizing before now. Its robot software offshoot Intrinsic announced it was laying off 40 workers last week, equating to 20% of its headcount, while its life sciences subsidiary Verily scaled back by 15%, representing around 240 people.
But today’s announcement will see roughly 12,000 roles worldwide at the company disappear.
In terms of the severance, what Alphabet is offering U.S. employees seems fairly generous at first glance. The company said that packages will “start at” 16 weeks salary, plus an additional two weeks for every year worked, while they will be paid in full for the entire notification period which is a minimum of 60 days. Moreover, it committed to paying all outstanding 2022 bonuses and unused vacation time, with 6 months’ healthcare and additional support services available.
Outside the U.S., Pichai simply said that the company would “support employees in line with local practices.”
Despite the layoffs, Pichai was keen to put a slightly positive spin on events, saying that good things can emerge from difficult times.
“As an almost 25-year-old company, we’re bound to go through difficult economic cycles,” he wrote. “These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities.”