As the tech industry’s next heavyweight, Google parent Alphabet is looking to cut thousands of jobs, according to media reports. Around 12,000 jobs will be lost worldwide. This corresponds to about six percent of the workforce.
The financial service Bloomberg and the Wall Street Journal report this on Friday based on an e-mail from company boss Sundar Pichai to employees. Areas outside the core activities should therefore be more affected. Initially, there was no official information from Alphabet.
The decision to cut jobs weighed heavily on him, Pichai wrote. “And I take full responsibility for the decisions that led us here.” After the “dramatic growth” of the pandemic, the workforce was built “in a different economic reality than today”.
First raised, now lowered
This week, Microsoft announced the cut of 10,000 jobs. Amazon previously announced that it would cut 18,000 jobs and the Facebook group Meta 11,000 jobs. With the booming business in the corona pandemic, the tech companies had increased their number of employees, in some cases significantly. According to the latest available figures, Alphabet had nearly 186,800 employees at the end of September. That was about 36,750 more than a year earlier.
Recently, however, the business development of the tech giants has slowed, partly due to economic concerns and high inflation. Google and Meta make their money almost exclusively from online advertising – and felt the frugality of companies large and small. At Amazon, in addition to consumers’ reduced willingness to buy, rising logistics costs also had an impact.
In terms of the size of the cuts, Alphabet is roughly at the level of Microsoft, where almost five percent of jobs will be lost. Meta even cut 13 percent of jobs. At Amazon, with its 1.5 million employees, mainly in logistics centers, 18,000 jobs are only a small part, but office jobs are badly affected. Twitter is on its own, with tech billionaire Elon Musk as the new owner cutting half of its roughly 7,000 employees.
Focus on AI
Pichai hinted that Alphabet’s non-core business will be more impacted by aligning its workforce with the company’s core priorities. This mainly includes the focus on the development of artificial intelligence, which was decided a few years ago.
What is special about Alphabet is that Google generates almost all of its income and thus helps finance future projects such as robotaxis from Waymo or delivery drones under the umbrella of the group. Alphabet spends billions on these areas, but has been trying to rein in spending for some time.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
