GOOGLE parent Alphabet Inc says it will cut about 12,000 jobs, more than 6% of its global workforce, becoming the latest tech giant to retrench after years of abundant growth and hiring.
The cuts will affect jobs globally and across the entire company, chief executive officer Sundar Pichai told employees in an email yesterday, writing that he takes “full responsibility for the decisions that led us here.”
Shares of Alphabet gained as much as 1.8% during pre-market trading in New York yesterday after the announcement was made public. The stock has fallen about 30% over the past year.
With the layoffs, Google joins a host of other tech giants that have drastically scaled back operations amid a faltering global economy and soaring inflation.
Meta Platforms Inc, Twitter Inc and Amazon.com Inc have all slashed their ranks. Thanks to a resilient search business, Google has been one of the longest tech holdouts.
But the company is dealing with a slowdown in digital advertising and its cloud-computing division continues to trail Amazon and Microsoft Corp.
“These are important moments to sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities,” Pichai wrote in the email.
He said the company has a “substantial opportunity in front of us” with artificial intelligence, a key investment area where Google is facing a surge in recent competition.
Pichai said Alphabet would be paying affected employees at least 16 weeks of severance and six months worth of health benefits in the United States, with other regions receiving packages based on local laws and practices.
Bonuses won’t be affected, he said.
In October, the company reported third-quarter earnings and revenue that missed analyst expectations.
Profit declined 27% to US$13.9bil (RM59.9bil) compared to the prior year.
At the time, Pichai said Google would curb its expenses and chief financial officer Ruth Porat said the number of new jobs would fall by more than half in the fourth quarter from the previous period.
Google’s reduction in headcount follows investor pressure to adopt a more aggressive strategy to curb spending.
In November, TCI Fund Management Ltd urged the Internet search giant in an open letter to publicly set a target for profit margins, increase share buybacks and reduce losses in its portfolio of Other Bets, Alphabet’s moonshot division. — Bloomberg