Google parent company Alphabet axes 12,000 jobs globally

Google’s parent firm Alphabet has said it will cut about 12,000 jobs worldwide, becoming the latest player in the technology industry to significantly reduce its workforce. 

The news was revealed in an email to Google employees that was later shared in a company blog post.

The job cuts represent about 6 per cent of the group's global workforce and will affect "roles across product areas, functions, levels and regions", according to Sundar Pichai, Alphabet's CEO. 

Similarly to the leaders of Amazon and Microsoft, Pichai cited a changing "economic reality" as the reason for the layoffs. The explanation made a veiled reference to the looming global recession and the changes in consumer behaviour following the Covid-19 pandemic. 

"Over the past two years we’ve seen periods of dramatic growth," he wrote. "To match and fuel that growth, we hired for a different economic reality than the one we face today."

Pichai added that he took "full responsibility" for the cuts. The CEO then thanked staff for "working so hard" in their roles, adding that their "contributions have been invaluable".

Affected US employees will remain on the company’s payroll for 60 days and receive at least 16 weeks' worth of salary in severance plus two weeks for every additional year at Google, as well as other benefits including six months of healthcare, job placement services and immigration support if needed, the company said. 

"Outside the US, we’ll support employees in line with local practices," Pichai said.

According to a recent filing with Companies House, Google has more than 5,500 staff in the UK. But it is unclear how many of these will be affected by the cuts.

While Pichai said the company was "bound to go through difficult economic cycles", he said he felt "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".

The Google parent company had grown its workforce by more than 50,000 employees over the past two years as booming demand for its services during the pandemic boosted profits.

However, in recent quarters, the company’s core digital ad business has slowed as the economic downturn and recession fears caused advertisers to pull back their spending.

Pichai said the layoffs were part of an effort to refocus on the company’s core business, as well as its early investments in artificial intelligence.

“These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he said.

Alphabet's news is the latest in a wave of layoffs that has hit the largest players in the technology industry, as inflation weighs on consumer spending and rising interest rates squeeze funding. 

Earlier this week, Microsoft announced it would cut 10,000 jobs while, at the start of the year, Amazon had confirmed reports that the company is planning to lay off 18,000 employees in what would be the largest job cuts in the company’s history.

Last November, Meta, the parent company of Facebook, Instagram and WhatsApp, also said it will cut its global workforce by 13 per cent, letting go of more than 11,000 employees. Shortly after, Salesforce, the cloud software provider, announced it would cut 8,000 jobs. 

In the days following Elon Musk’s $44bn acquisition of Twitter, the social media company laid off approximately half its workforce. Lyft, Snap, Stripe and other technology firms have also laid off workers in recent months.

Following the announcement, Alphabet shares rose by 3.5 per cent in electronic trading before the stock market opened.