January 20 (Reuters) – Google’s parent company Alphabet Inc. (GOOGL.O) In a staff memo, it said it laid off nearly 12,000 jobs, doubling down on artificial intelligence (AI) and layoffs staff supporting experimental projects, as it faced a “different economic reality”.
The layoffs affect 6% of the workforce and come after thousands of layoffs at tech giants. Amazon.com Inc. (AMZN.O), Microsoft company (MSFT.O) and Aim Platforms Inc. (META.O) Companies that have shrunk in the wake of a pandemic-induced hiring spree have left them on the loose in a weak economy.
Shares of Mountain View, California-based Alphabet, which has increased its workforce by nearly a third through 2020 and 2021, rose 4% on Friday. It’s down 30% in the last 12 months, reflecting a 24% drop in the broader tech industry. (.IXIC).
Sundar Pichai, Alphabet’s boss since 2019, said in a Friday note that he took “full responsibility” for the decisions that led to the layoffs.
As Alphabet seeks to fill its products with more AI, Pichai, whose salary has recently been more closely tied to performance, said it’s time to “sharpen our focus, restructure our cost base, and direct our talent and capital towards our highest priorities.” , echoing comments from Microsoft Announcing the layoffs on Wednesday.
Alphabet, a longtime leader in AI, faces competition from Microsoft. increase your share On ChatGPT – a promising chatbot that answers queries with human-like responses.
Meanwhile, Alphabet’s main source of revenue, advertising dollars, is feeling pressure from businesses slashing budgets as consumers cut back on their spending.
“It is clear that Alphabet is not immune from the difficult economic backdrop that recession concerns are growing in the US,” said Susannah Streeter, analyst at Hargreaves Lansdown.
“Ad growth is at a boiling point… Competition heats up as Alphabet faces a strong competitor at TikTok and Instagram competes for key YouTube viewers.” fines
Evercore ISIS analyst Mark Mahaney said Alphabet’s record headcount poses a huge margin risk as it enters fiscal 2023, and Bernstein analyst Mark Shmulik said the layoffs could save Alphabet company $2.5 to $3 billion in costs.
GREAT BUSINESS INTERRUPTIONS
[1/4] The Google LLC logo is seen at the Google Store Chelsea in New York City, USA, on January 20, 2023. REUTERS/Shannon Stapleton
With Alphabet’s staff cuts, layoffs at the four largest tech companies in the US have cut a total of 51,000 jobs over the past few months. They fueled recession fears even as the US job market was in recession. stays tight.
“The tech sector is a bit like the adage in the coal mine,” said Stuart Cole, economist at Equiti Capital, and believes the job layoffs in tech herald the job security outlook is finally starting to get more negative.
Apple (AAPL.O)Hiring more cautiously through the pandemic has delayed cuts so far. On Friday, though, the website AppleInsider reported Sources say that the iPhone maker has started laying off non-seasonal employees in the retail channel at places like Best Buy. (BBY.N) Malls.
Apple was not immediately available to comment on the report.
‘COMFORT IN BRIEF’
Alphabet is working on a major AI launch, two people familiar with the matter told Reuters. One source said it would be in the spring. The New York Times also reported that Google plans to launch a search engine with more than 20 new products and chatbot features.
Pichai said those who lost their jobs included recruiters, corporate personnel, and people working in engineering and product teams. A company spokesperson told Reuters that Google is laying off most workers at Area 120, its in-house incubator for new projects.
The Alphabet Workers Union said in a statement that it was “some comfort” for the company’s leadership to take “full responsibility”.
“It’s appalling that our business is on the chopping block first and that shareholders could see a few more spots on a chart next quarter,” the union said.
In the United States, where Alphabet has already emailed affected employees, staff will receive severance and six months of medical care, as well as immigration support.
In the note, Pichai said that notices of layoffs overseas will take longer due to local employment laws and practices. Employees in Asia will learn from February if the discount affects them.
Jeffrey Dastin from Davos, Switzerland, Akash Sriram, Deep Vakil, Chavi Mehta, Tiyashi Dutta, Nivedita Balu and Yuvraj Malik from Bengaluru; Editing Elaine Hardcastle, Alexander Smith, Nick Zieminski, Sayantani Ghosh
Our standards: Thomson Reuters Trust Principles.
