Google cuts 12,000 jobs due to technology problems

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Google’s parent company Alphabet announced on Friday it would cut about 12,000 jobs globally, citing a changing economic reality as it became the latest US tech giant to implement large-scale restructurings.

The layoffs come a day after Microsoft said it would cut its headcount by 10,000 in the coming months, following similar cuts by Facebook owner Meta, Amazon and Twitter as the tech sector girdles for the economic downturn.

The cuts follow a major hiring rush during the height of the coronavirus pandemic, as companies scrambled to meet demand as people went online for work, school and entertainment.

“The past two years have seen periods of dramatic growth,” Alphabet CEO Sundar Pichai said in an email to employees.

“To match and fuel that growth, we assumed for a different economic reality than we face today.”

A review is underway to make sure people and their roles align with the company’s priorities, Pichai said, adding that the workforce would be cut by about 12,000 positions.

Alphabet employed nearly 187,000 workers worldwide at the end of September 2022. The cuts represent just over 6% of its total workforce.

The cuts will be “across departments, functions, levels of responsibility and regions,” Pichai added.

“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that brought us here.”

‘Unsustainable’

Pichai said the cuts will “sharpen our focus” on priorities, including artificial intelligence.

“Being constrained in some areas allows us to bet heavily on others,” he said.

The globally dominant search engine Google has come under pressure with the emergence of ChatGPT, a Microsoft-backed chatbot that can generate rich, human content in seconds.

Microsoft said the technology will be used to bolster Bing, Google’s longtime search rival.

Google has turned to founders, Larry Page and Sergey Brin, who have left their day-to-day roles at the tech titan, for help in responding to the threat posed by the chatbot, according to a New York Times report.

Brin and Page met with Google executives several times last month to brainstorm, the Times reported.

Google declined to comment directly on the Times report.

“We have long focused on developing and deploying artificial intelligence to improve people’s lives,” said Google spokeswoman Lily Lin.

“We continue to test our AI technology internally to make sure it is useful and safe, and we look forward to sharing more experiences externally soon.”

Pichai announced severance packages for US employees, who will receive at least 16 weeks of salary, their 2022 bonus, paid vacations and six months of health coverage.

He said he remained “optimistic about our ability to deliver on our mission, even in our most difficult days.”

Wall Street welcomed the cuts: shares of Alphabet finished the official trading day up more than 5% at $98.02.

This tracked the effect of job cuts on other tech giants, with Meta’s share price surging 35% since announcing 11,000 job cuts on Nov. 9 and Amazon’s shares surging. up 13% since 18,000 people were laid off earlier this month.

Analysts said the tech big guns had previously overspent, not seeing a slowdown on the horizon.

Daniel Ives of Wedbush Securities said the layoffs highlight a long period of irresponsible spending in a sector wallowing in “hypergrowth”.

“The reality is that tech stalwarts have been being hired at an unsustainable rate, and now the darker macro is forcing these layoffs across the tech space,” he said.

According to tech site Layoffs.fyi, nearly 194,000 industry employees have lost their jobs in the US since the start of 2022, not including those Alphabet announced on Friday.

AFP extension

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