By Efthymis Oraiopoulos
Google parent Alphabet Inc.’s CEO sent a note to employees Friday announcing the elimination of 12,000 jobs, as a response to economic changes over the past two years.
The move—coming two days after a similar number of job cuts from Microsoft—will affect both U.S. and overseas employees.
“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 and Google CEO Sundar Pichai wrote.
‘Difficult Economic Cycles’
Alphabet’s layoffs followed a review of its people and priorities, leading to a workforce reduction hitting various geographies, Pichai said. Among those losing their jobs are recruiters, corporate staff, and people working on engineering and product teams.
For the U.S. layoffs, the tech giant will provide a severance package and for overseas employees they will follow local practices.
“As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he wrote.
Echoing Microsoft’s announcement, Pichai talked about the company’s focus on artificial intelligence. This reflects renewed competition between the tech giants sparked by Microsoft’s growing partnership with the San Francisco startup OpenAI.
“We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly,” he wrote.
The 12,000 jobs amount to 6 percent of Alphabet’s workforce. Pichai became CEO of Alphabet and Google in 2019.
Susannah Streeter, an analyst with Hargreaves Lansdown, said advertising, the key business underpinning Google’s search engine and YouTube, was not immune to economic turbulence.
“Ad growth has come off the boil, a sharp contrast from the busy days of the post-pandemic re-opening which saw a surge in consumer spending,” she said. The company faces competitive and regulatory threats as well, she said.
It was unclear if Alphabet would take a one-time financial charge related to the job cuts. Microsoft’s severance packages, lease consolidation, and hardware-lineup changes will cost the company more than $1 billion, it said earlier this week.
More than 38,000 tech-industry workers have faced layoffs this year alone, after nearly 155,000 lost their jobs in 2022, tracking website Layoffs.fyi stated.
Reuters and The Associated Press contributed to this report.