Google is laying off 12,000 employees, 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.
Alphabet CEO Sundar Pichai, Google’s parent company, informed staff at the Silicon Valley giant of the cuts on Friday in an email that was also published on the company’s news blog.
It is one of the company’s biggest layoffs ever and adds 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 darkening outlook for the industry. Just this month there have been at least 48,000 layoffs by large companies in the sector.
“Over the past two years, we have seen periods of dramatic growth,” Pichai wrote. “To match and fuel 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 alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply saddened” by the layoffs.
Legislative documents illustrate how Google’s workforce grew during the pandemic, rising to nearly 187,000 people at the end of last year from 119,000 at the end of 2019.
Pichai said Google, which was founded nearly a quarter century ago, “had to go through difficult economic cycles.”
“These are important moments to sharpen our focus, restructure our cost base and direct our talent and capital to our highest priorities,” he wrote.
There will be job cuts in the United States and in other unspecified countries, according to Pichai’s letter.
The tech industry has been forced to freeze hiring and cut jobs “as the clock has struck midnight on hypergrowth and digital advertising is on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi and John Katsingris wrote Friday.
Just this week, Microsoft announced 10,000 layoffs, or nearly 5% of its workforce. Amazon said this month it is cutting 18,000 jobs, although that is 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 cut 11,000 jobs, or 13% of its workforce. Elon Musk cut jobs at Twitter after he bought the social media company last fall.
These job cuts also affect smaller players. British cybersecurity company Sophos laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase cut 20% of its workforce, about 950 jobs, in its second round of layoffs in less than a year.
“The stage 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.
US employment has been robust despite signs of a slowing economy, with an additional 223,000 jobs added in December. Still, the technology sector grew unusually quickly over the past several 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, yet even after the latest round of cuts, those same companies are still much bigger than they were before the economic boom from the pandemic began.