Google parent Alphabet is slashing 12,000 jobs

The cuts will affect jobs globally and across the entire company, Chief Executive Officer Sundar Pichai told employees in an email on Friday, writing that he takes “full responsibility for the decisions that led us here.”

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 avoiding major workforce reductions. 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, reengineer 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. 

In October, the company reported earnings and revenue that missed analyst expectations. Profit declined 27% to $13.9 billion 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. “The company has too many employees and the cost per employee is too high,” TCI Managing Director Chris Hohn said, noting that Alphabet’s headcount had swelled 20% per year since 2017.

According to the human-resources consulting firm Challenger, Gray & Christmas Inc., the most job cuts in 2022 were in the tech sector — 97,171 for the year, up 649% compared to the previous year.

Google has made a series of cost-cutting moves in recent months, canceling the next generation of its Pixelbook laptop and permanently shuttering Stadia, its cloud gaming service. Earlier in January, Verily, a biotech unit of Alphabet, said it was cutting 15% of its staff. 

Pichai said Alphabet would be paying affected employees 16 weeks of severance and six months worth of health benefits in the US, with other regions receiving packages based on local laws and practices.