Google parent Alphabet to lay off 12,000 employees, chief executive Sundar Pichai says

Latest job cuts follow those at Microsoft and Amazon

Sundar Pichai, chief executive of Alphabet. Bloomberg
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Google parent Alphabet is laying off 12,000 of its nearly 190,000 employees, about 6 per cent of the total workforce, after a review across its product areas and functions, amid a wave of layoffs across the technology industry.

“I take full responsibility for the decisions that led us here,” company’s chief executive Sundar Pichai said in an email to employees on Friday, viewed by The National.

“We have 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 are eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.

“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.”

Alphabet's share price jumped by about 2 per cent during premarket trading to $94.67 on Friday after the announcement. The stock has fallen more than 30 per cent over the past year.

In October, Alphabet, the world's largest provider of search and video advertisements, reported a 27 per cent drop in third-quarter net profit on an annual basis.

The company’s net profit dropped to about $13.9 billion in the three months through to the end of September, compared with the same period in 2021.

“As an almost 25-year-old company, we are bound to go through difficult economic cycles. These are important moments to sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities,” Mr Pichai said.

“Being constrained in some areas allows us to bet big on others. Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.”

Alphabet spent more than $10.3 billion on research and development, or 14.8 per cent of its total sales in the third quarter of last year. This was about 34 per cent more than the R&D expenditure for the same period in 2021.

“I remain optimistic about our ability to deliver on our mission, even on our toughest days. Today is certainly one of them … we are getting ready to share some entirely new experiences for users, developers and businesses, too,” Mr Pichai said.

“We have a substantial opportunity in front of us with AI [artificial intelligence] across our products and are prepared to approach it boldly and responsibly.”

Earlier this month, Verily, a biotechnology unit of Alphabet, said it was cutting about15 per cent of its staff.

In the recent months, Google has also cancelled its next-generation Pixelbook laptop and permanently closed its cloud-gaming service Stadia to cut costs.

Alphabet’s job cuts follow similar moves at Microsoft and Amazon. After boosting hiring at the height of the Covid-19 pandemic, demand has been slowing as interest rates rise and recession fears grow, leading to a sell-off in the technology sector last year and a disappointing earnings season.

Microsoft is laying off 10,000 of its 221,000 employees to adjust to changing macroeconomics and to cut overall costs at the technology company, amid a wave of industry layoffs.

The world’s biggest e-commerce company, Amazon, announced this month that it was laying off more than 18,000 workers, about 6 per cent of its workforce, as concerns about the US economy persist and fears of a global slowdown mount.

In November, Meta founder Mark Zuckerberg announced the company would lay off 11,000 staff, or 13 per cent of the total workforce, amid declining revenue.

PC maker Hewlett Packard said it would lay off as many as 6,000 employees over the next three years.

HP, which has a payroll of about 61,000 people, said it aimed to secure $1.4 billion in annual savings through 2025.

Meanwhile, Twitter went through a tumultuous period last year in which half of its 7,500 employees were sacked a few days after the social media platform was taken over by billionaire Elon Musk in late October.

Apple in October paused hiring for most jobs outside of research and development, according to a report from Bloomberg.

Updated: January 20, 2023, 6:37 PM
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