Google cuts 12,000 jobs, layoffs spread across technology sector

LONDON (AP) — Google is laying off 12,000 workers, or about 6% of its workforce, becoming the latest tech company to trim staff as the economic boom the industry rode during the COVID-19 pandemic fizzles.

Google CEO Sundar Pichai, who also heads parent company Alphabet, informed employees of the Silicon Valley giant on Friday about the cuts in an email that was also posted on the company’s news blog.

It’s one of the company’s biggest layoffs ever, adding to tens of thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent Meta and other tech companies as they tighten their belts amid a bleak outlook for the industry. This month alone there have been at least 48,000 job cuts by large companies in the sector.

“Over the past two years, we have seen periods of dramatic growth,” Pichai wrote. “To match and drive this growth, we hired for a different economic reality than the one we face today.”

He said the layoffs reflect a “rigorous review” by Google of its operations.

The jobs being eliminated “cut across the alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” for the dismissals.

Regulatory filings illustrate how Google’s workforce swelled during the pandemic, reaching nearly 187,000 people at the end of last year from 119,000 at the end of 2019.

Pichai said Google, founded nearly a quarter century ago, was “bound to go through difficult economic cycles.”

“These are important moments to sharpen our focus, reconstruct our cost base and direct talent and capital to our highest priorities,” he wrote. He singled out the company’s investments in artificial intelligence as an area of ​​opportunity.

There will be layoffs in the United States and in other unspecified countries, according to Pichai’s letter.

The technology industry has been forced to freeze hiring and cut jobs “as the clock has struck midnight on hypergrowth and digital advertising headwinds are on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi and John Katsingris wrote Friday.

Just this week, Microsoft announced 10,000 layoffs, or almost 5% of the workforce. Amazon said this month it is cutting 18,000 jobs, though that’s a fraction of its 1.5 million-strong workforce, while business software maker Salesforce is laying off about 8,000 employees, or 10% of its total. Last fall, Facebook parent Meta announced it would lose 11,000 jobs, or 13% of workers. Elon Musk cut jobs at Twitter after he bought the social media last fall.

These job cuts also affect smaller players. British cybersecurity firm Sophos has laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase cut 20% of its workforce, around 950 jobs, in its second round of layoffs in less than a year.

“The scene is being set: tech names across the board are cutting costs to preserve margins and become leaner” in the current economic climate, the Wedbush analysts said.

U.S. employment has been robust despite signs of a slowing economy, with another 223,000 jobs added in December. Nevertheless, the technology sector grew exceptionally quickly in recent years due to increased demand as employees began to work remotely.

CEOs of a number of companies have taken the blame for growing too fast, but those same companies, even after the latest round of cutbacks, remain much larger than they were before the economic boom from the pandemic began.

In the layoff announcements, both Pichai and Microsoft CEO Satya Nadella emphasized the importance of leveraging their advances in artificial intelligence technology, reflecting renewed competition between the tech giants sparked by Microsoft’s growing partnership with San Francisco startup OpenAI.

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