After Meta, Microsoft and Amazon, Google is also cutting staff. The American giant is preparing to lay off 12,000 employees, or more than 6% of its global workforce. Sundar Pichai, CEO of Google and Alphabet, announced this Friday in a blog post and email sent to all teams. The boss spoke of one of the “hardest” days in the history of the group which will soon celebrate its twenty-five years.
“The fact that these changes will affect the lives of Googlers [les salariés de Google, NDLR] it weighs heavily on me and I take full responsibility for the decisions that led us there, ”the leader wrote in his message. The American giant does not specifically specify which functions it is. But the cuts apply to “all Alphabet, all products, functions, tiers and geographies.” Preserved professions are those “aligned with the company’s top priorities”, especially artificial intelligence. When contacted, Google had no information on possible layoffs in France.
The Sealed Tech
The announcement comes as Google, which employed more than 186,000 people worldwide at the end of September, will present its annual results on February 2. It confirms the economic slowdown that has been affecting the entire tech sector for months.
Counting the recent social plans of Meta (11,000 affected employees), Microsoft (10,000), Amazon (18,000), and Twitter (3,700), nearly 55,000 jobs at the tech giants just disappeared. According to Layoffs.fyi, which points to industry-wide layoffs, more than 200,000 jobs have disappeared since the start of 2022, as there were already 193,000 before Google’s announcement today. At this stage, only Apple has kept its workforce, being the group protected by its hybrid model that combines hardware, services and content.
A “very different” economic reality.
Conversely, Google is, like Meta, particularly exposed to online advertising, which accounts for nearly 80% of its revenues. However, after the war in Ukraine and the resulting macroeconomic slowdown, advertisers are reducing their ad spend.
In the third quarter, the revenue that Google generates through advertising increased by just 2.5%. Ad revenue from YouTube, Google’s video platform, fell nearly 2%. In addition to weaker growth, adding up all revenues, the American giant had also recorded a sharp decline in net income, which had melted by a quarter.
Sundar Pichai has recognized these difficulties. The paradoxically positive page of Covid, when the pandemic had exploded the time spent online, seems to have finally turned. “In the last two years we have experienced periods of very strong growth. To respond and fuel this growth, we recruited, but it was a very different economic reality than we face today,” writes Sundar Pichai.
Substantial opportunities with AI
The Google boss still wants to be optimistic. “With artificial intelligence, we have a remarkable opportunity ahead of us,” writes Sundar Pichai. A message that comes as the ChatGPT bot from its rival OpenAI has been all the rage in recent weeks, to the point of eclipsing Google’s progress in this area.
In the United States, affected employees will continue to be paid for at least sixty days. An allowance equal to sixteen weeks’ salary plus two weeks for each additional year of service will also be paid, in addition to the 2022 bonuses. Employees were invited to telecommute this Friday. A group meeting (“town hall meeting”) will be held on Monday.
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