Google is laying off a significant amount of their workforce, around 12,000 jobs, which is 6% of their global workforce, due to the rise in inflation and anticipation of a downturn in global markets.
The CEO, Sundar Pichai, announced the cuts in an email to employees and a blog post. This follows similar layoffs at other technology companies such as Microsoft, Amazon, and Meta. Additionally, Google’s parent company, Alphabet, recently announced smaller layoffs at their subsidiaries, Verily and Intrinsic.
Also, and while Google rakes in a lot of money from the search business, Google is facing challenges in its digital advertising and cloud computing sectors, where it lags behind competitors Amazon and Microsoft.
According to CEO Sundar Pichai, Google understands that this transition will be difficult, and is committed to supporting its employees as they seek new opportunities.
In the US, the company will provide employees with a full notification period of at least 60 days, as well as a severance package starting at 16 weeks of salary plus two additional weeks for each year worked at the company, and vesting of at least 16 weeks of GSU (Google Stock Units).
The company will also pay out 2022 bonuses and remaining vacation time and offer 6 months of healthcare, job placement services, and immigration support for those affected.
For employees outside the US, the company will provide support in accordance with 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. 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,” says the CEO.
According to Challenger, Gray & Christmas Inc., a human-resources consulting firm, the tech sector had the highest number of job cuts in 2022, with 97,171 cuts, a 649% increase from the previous year.