Alphabet, Google’s parent company, is cutting 12,000 jobs in the company’s largest ever layoffs. Affecting more than six percent of its global workforce, the firings are the latest in an unrelenting trend of big tech companies making similar choices. Sundar Pichai, Alphabet’s chief executive, wrote to Google employees about the “difficult news” in a note posted to the company’s blog on Friday. “This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that,” Pichai writes. “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.”
The cuts will impact employees across product areas, countries, and responsibilities. Google will pay U.S. employees at least 16 weeks of severance, their 2022 bonus, and six months worth of health benefits. Packages for those affected in other countries will reflect local practices. Pichai added that the company “hired for a different economic reality than the one we face today”. In October 2022, Alphabet reported a profit decline of 27 percent compared to the previous year. Since, Pichai announced that Google would hinder expenses, one of a number of company-wide cost-cutting solutions including shutting down its cloud gaming service, Stadia, which ceased operations at midnight on Wednesday.
Making matters worse, Microsoft announced that it too will let go of 10,000 employees over the coming months. The plan to cut thousands of employees was announced in a blog post on Wednesday, which was also shared with Microsoft’s employees. In it, CEO Satya Nadella noted the impact of decreased consumer spending after a boom during the pandemic, and a need to “deliver results on an ongoing basis, while investing in our long-term opportunity.”
“It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas,” said Nadella. These areas are likely to include artificial intelligence, with the CEO acknowledging surging interest and advancements in the technology. Rumours are also currently circulating that Microsoft is considering investing several billion dollars in OpenAI, the company behind popular artificial intelligence chatbot ChatGPT.
Even so, Microsoft’s future hiring plans will be cold comfort to current employees on the chopping block. Microsoft had approximately 221,000 full-time employees in the middle of 2022, with 122,000 in the U.S. and 99,000 internationally. The newly announced layoffs will reduce the company’s workforce by just under five percent. The one silver lining to this bad news is that Microsoft at least won’t be doing its massive cuts in one fell swoop, Twitter-style. The layoffs will begin from today and will continue through to March, hopefully giving employees time to make a plan in case they end up part of the unlucky five percent.
“These decisions are difficult, but necessary,” said Nadella. “They are especially difficult because they impact people and people’s lives – our colleagues and friends. We are committed to ensuring all those whose roles are eliminated have our full support during these transitions.”
In addition to 60 days’ notice prior to their untimely termination, cut employees who are eligible for U.S. benefits have been promised “above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, [and] career transition services.” Employees outside the U.S. will get whatever their local laws entitle them to. The news of these layoffs from two of the most powerful tech companies in the world is a stark reminder that even the most
successful companies are not immune to the economic realities of the current climate. These layoffs also come at a time when tech companies are facing increased scrutiny and criticism for their size and influence, and calls for more regulation and oversight.
The question now is, who will be next? As the economy continues to struggle, it’s likely that more companies in the tech industry will have to make difficult decisions about their workforce. For many employees, the future feels uncertain and the job market is becoming increasingly competitive.
These layoffs are also a reminder of the human cost of corporate decisions. Thousands of individuals will be impacted by the loss of their jobs, and it’s important for the companies to provide support and resources during this difficult transition.
Overall, the recent job cuts by Alphabet, Google’s parent company, and Microsoft are a sign of the tough times that the tech industry is facing. Despite being leaders in their respective fields, even they are not immune to the economic pressures that are affecting the entire world. It’s important for companies to consider the impact of their actions on their employees, and for workers to prepare for an uncertain job market in the coming months.
