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Google to Lay Off 12,000 Employees
From:
Kathleen Greenler Sexton --- Subscription Expert Kathleen Greenler Sexton --- Subscription Expert
For Immediate Release:
Dateline: Boston, MA
Tuesday, January 24, 2023

 

Three weeks into the new year, another major tech company announced layoffs. On Friday, Google and Alphabet CEO Sundar Pichai notified 12,000 staff via email that they would lose their jobs, representing about 6% of Google’s workforce, reports CNBC. Some Google layoffs would begin immediately, while those in other countries might take longer due to local laws and employment practices. Google hosted a virtual town hall yesterday, and he told employees they could work from home on Friday as they absorbed the “difficult news.”

“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,” Pichai wrote in the email, posted to Google’s blog. “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. To fully capture it, we’ll need to make tough choices.”

“So, we’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions,” said the CEO.

How Google will support impacted U.S. employees

Pichai outlined how Google and Alphabet would support impacted employees in the U.S., who were notified in a separate email.

  • Employees would receive pay for the full notification period of 60 days.
  • Laid off U.S. staff will receive 16 weeks of severance pay plus two weeks for each additional year of service.
  • The company would accelerate at least 16 weeks of GSU vesting, and pay 2022 bonuses and remaining vacation time.
  • Employees will receive six months of healthcare, job placement services and immigration support.
  • Laid off employees outside the United States will receive similar severance packages to be compliant with local laws and employment practices.

“As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” wrote Pichai.

The CEO said the company pivoted to artificial intelligence early on which, he said, has helped make Google products better. He said they will soon be sharing “some entirely new experiences” for users, developers and businesses.

“All this work is a continuation of the ‘healthy disregard for the impossible’ that’s been core to our culture from the beginning. When I look around Google today, I see that same spirit and energy driving our efforts. That’s why I remain optimistic about our ability to deliver on our mission, even on our toughest days. Today is certainly one of them,” Pichai said.

Six wooden people, three with red Xs on them, representing staffing cuts
Source: Envato Elements

Monday’s town hall meeting

Yesterday, Google hosted an online town hall to help answer employee questions about Google layoffs including why managers weren’t aware that layoffs were coming and the rationale behind the company’s communication strategy, says Business Insider. On social media, impacted employees are reporting they felt blindsided and that some of the layoffs felt random. Employees didn’t know who else had been laid off, and some were cut off from internal communication channels.

“Cuts were made in a very structured, very prioritized way. Nothing was random about it,” said Pichai, according to 9to5Google.

Fiona Cicconi, chief people officer at Google, said that about 750 company leaders responsible for product strategy and business were involved in the decision making about the layoffs, reports Business Insider. To include the more than 30,000 managers at Google would have added weeks to the communication process about the layoffs.

Other recent tech layoffs

Prior to Google’s announcement, Microsoft announced it would cut 10,000 jobs and take a $1.2 billion hit for the severance packages and related costs. Amazon significantly increased its layoff estimate to 18,000, much higher from the previously-announced 12,000 staff cuts. Salesforce also announced layoffs, cutting 8,000 jobs and closing some offices. In November, Meta said they would lay off 11,000 employees, representing about 13% of the company’s workforce.

Insider Take

This group of tech companies alone represents 59,000 in employee layoffs in just the last several months. For employees, this is absolutely tragic, especially for employees who didn’t anticipate that layoffs were a possibility. For subscribers, we wonder how their products and services will be impacted with major staff cuts at top companies.

Takeaway for subscription companies: We have to wonder how we got to this point. Sure, the pandemic and our current economic reality played a role, and companies may be using those as an excuse to “clean house.” Companies of this magnitude have teams of people following financials down to the penny and others who are managing company priorities and aligning them with workforce needs. It feels like each tech company is falling in line with the layoffs because other companies have laid the groundwork for them to make such layoffs acceptable. They don’t have to be the first to make major cuts. Wouldn’t incremental changes not only be more financially advantageous, helping companies like Microsoft avoid a $1.2 billion charge, but they would be more palatable and humane as well? Who do you think will be next?

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