The global economic downturn has become a reality, with Google announcing that it will let go of 12,000 jobs worldwide.
The other tech giants that have already taken the measure of cost-cutting and hence layoffs are Microsoft, Meta and Amazon.
The India – origin CEO said in an email, “I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles.” Pichai explained the layoffs at Google had been carried out after a “rigorous review” of its operations.
The roles that have been cut are across the board in product areas, functions, levels and regions.
The company is streamlining with the current economic condition, and after seeing some growth during the pandemic, there was much activity in hiring. However, the economic slowdown has punctured that growth and brought a need for reevaluating strategies to match the current market scenario.
Microsoft announced 10,000 job cuts, or almost 5 per cent of its workforce, just two days ago.
While both Amazon and Facebook have reported trimming their workforce by 18000 jobs and 11,000 positions, respectively.
Pichai apologised for the fact that these changes will impact the lives of Googlers, which weighs heavily on him, and that he takes full responsibility for the decisions that led to the layoffs.
During the reign of the pandemic, digital consumption has soared to an all-time high, leading companies not only to diversify but also to scale up hiring.
However, as normality resumed after the pandemic, consumers cut back on their digital footprint, forcing companies to restructure and cut costs.
Although Pichai maintained that the company still had a massive opportunity due to “early investments in AI”, Google would still have to make tough choices.
“As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, re-engineer our cost bases, and direct our talent and capital to our highest priorities,” Pichai said.
“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,” he said.
Google in the US will pay its employees during the entire notification period (minimum 60 days), offer a severance package starting at 16 weeks’ salary plus two weeks for every additional year at Google, and six months of healthcare, job placement services, and immigration support for those affected.
However, he said this process would take longer in other countries due to local laws and practices”.
“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. 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,” Pichai added.
Microsoft CEO Satya Nadella, just a day before Google, said his company would lay off less than five per cent of its workforce as the technology giant aligns its cost structure with revenue and customer demand.
Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs” through the end of the third quarter of the fiscal year 2023. Describing the current times as that of “significant change”, Nadella said customers who accelerated their digital spending during the pandemic, are now optimising their digital expenditure to do more with less.
Nadella noted that the next significant wave of computing is being born with advances in Artificial intelligence “as we’re turning the world’s most advanced models into a new computing platform.”
The downturn in the tech sector that began last year continues into 2023. Meta, the parent of Facebook, WhatsApp and Instagram, laid off more than 11,000 workers or approximately 13 per cent of its workforce, last year in November.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted,” Facebook founder Mark Zuckerberg said previously.