Google’s parent Alphabet Inc is eliminating about 12,000 jobs, or 6 per cent of its workforce, it said Friday (Jan 20), as Silicon Valley reels from recent layoffs and faces a troubled outlook.
Alphabet, whose shares rose 3 per cent in pre-market trading, is making the cuts just as the US company confronts a threat to its long-held perch atop the technology sector.
For years Alphabet has attracted top talent to build Google, YouTube and other products that reach billions of users, but it is now locked in competition with Microsoft Corp in a burgeoning area known as generative artificial intelligence.
The cuts at Alphabet come days after Microsoft said it would lay off 10,000 workers.
Alphabet CEO Sundar Pichai told staff in a memo that the firm had reviewed its products, people and priorities, leading to job cuts across geographies and tech.
“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,” he said.
“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here.”
Alphabet’s job losses affect teams across the company including recruiting and some corporate functions, as well as some engineering and products teams.
The layoffs are global and impact US staff immediately.
In response to CNA’s queries about employees in Singapore, a spokesperson for Google referred to Pichai’s staff memo.
Alphabet has already emailed affected employees, the memo said, while the process will take longer in other countries due to local employment laws and practices.
In the memo, Pichai said US employees would be paid during the full notification period – a minimum of 60 days.
A severance package starting at 16 weeks’ salary, and two weeks for every additional year at Google, will also be provided.
Alphabet will continue to pay 2022 bonuses and any remaining vacation time employees might have.
The company will also offer six months of “healthcare, job placement services and immigration support” for those affected.
Alphabet will also “accelerate” at least 16 weeks of Google Stock Units vesting, said Pichai, adding that employees outside of the US will be supported in line with local practices.
The news comes during a period of economic uncertainty as well as technological promise.
“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI,” Pichai said.