Google Job Cuts: Reports Say Alphabet Laying Off 10,000 Staff as Sundar Pichai Trims Costs

By Jacob J
November 22, 2022 13:44 +08

My firstborn child died in my arms, I felt his last heartbeat: Elon Musk; says no mercy

In the latest tech layoff, Alphabet is preparing to cut as many as 10,000 jobs, reports say. The job cut at Google parent will affect 10,000 'poor performing' employees, who make up about 6 percent of the tech giant's workforce.

The layoff will be rolled out as Google releases a new ranking system that rates employees on performance parameters, IANS reported, citing The Information.

"A new performance management system could help managers push out thousands of underperforming employees starting early next year. Managers could also use the ratings to avoid paying them bonuses and stock grants," says the report.

google parent alphabet overtakes apple — Letters spell the word "Alphabet" as they are seen on a computer screen with a Google search page in this photo illustration taken in Paris, France, August 11, 2015 Reuters

The newly minted performance appraisal system has wider significance for the employees as it reduces the percentage of employees who can score a high rating. The plan also streamlines bonuses and stock grants, the report says.

Alphabet, which has 187,000 employees, has not commented on the reports of the job cuts.

The Google parent's net profit in the third quarter was $13.9 billion, which marked a 27 percent drop from a year earlier. Alphabet's revenue, however, rose 6 percent to $69.1 billion.

'Blood on the Streets' Warning

In August, the search giant issued a stark warning to the staff in view of the dim outlook for the business climate. Google executives reportedly warned workers to either boost performance or prepare to leave. An internal message circulated among the employees warned that "there will be blood on the streets" if the next quarterly earnings are not good.

In a company message viewed by Insider, Google Cloud sales leadership threatened employees with an "overall examination of sales productivity and productivity in general." The message added that if next quarter results "don't look up, there will be blood on the streets.

Alphabet and Google CEO Sundar Pichai had earlier told employees that they must improve productivity due to fierce economic headwinds. Pichai said that he wanted to solicit ideas from his employees on how to get "better results faster."

The latest report says that Pichai is aiming to make Alphabet 20 per cent more efficient. According to Pichai, the company is investing in long-term projects like quantum computing. He adds that it is important to be "smart, to be frugal, to be scrappy, to be more efficient"

"We're committed to taking care of our employees. I think we're just working through a tough moment macroeconomically and I think it's important we as a company align and work together," said Pichai, IANS added.

Tech Companies Trimming Jobs

With economic gloom catching up, several companies, especially, tech organizations, have either announced job cuts or frozen hiring.

Many Big Tech companies like LinkedIn, Meta, Oracle, Twitter, Nvidia, Snap, Uber, Spotify, Intel and Salesforce have either laid off employees or frozen hiring amid the global economic downturn.

While Meta laid off 11,000 workers in October, Twitter cut 3,700 jobs after the takeover by billionaire Tesla CEO Elon Musk. Earlier, Snap laid off some 20 percent of its workforce and Lyft cut nearly 700 jobs.

Also last month, tech firm Philips announced to slash 4,000 jobs as the company faces "multiple challenges" which was reflected in its Q3 earnings.

New Philips CEO Roy Jakobs said the move to improve productivity and agility "includes the difficult, but necessary decision to immediately reduce our workforce by around 4,000 roles globally, which we do not take lightly and will implement with respect towards impacted colleagues."

Earlier this year, Google executives had warned workers to either boost performance or prepare to leave. An internal message circulated among the employees warned that "there will be blood on the streets" if the next quarterly earnings are not good.

Shockingly, tech giant Apple laid off recruiters after warning earlier that an economic downturn was forcing a hiring freeze. Bloomberg News reported that as many as 100 contract workers have been fired, indicating the spending squeeze at the iPhone maker.

The development came two weeks after Apple reported record revenues in the quarter ended June 30.

Japan's work hoursOffice workers are reflected in a glass railing as they cross a street during lunch hour in Tokyo June 1, 2015. REUTERS/Thomas Peter/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH BUSINESS WEEK AHEAD SEPTEMBER 26 FOR ALL IMAGES Reuters

In July, Microsoft laid off hundreds of employees ahead of its quarterly earnings and amid growing economic uncertainty. The move, the company said, was in a bid to "realign" groups and roles after the close of its fiscal year on June 30, even as the company intends to grow its headcount in the coming months.

Tesla said in June it was planning to axe 10 percent of staff, along with freezing hiring amid stalled Twitter deal, global macroeconomic conditions like chip shortage, rising inflation and high interest rates. Elon Musk had emailed Tesla executives, telling them the electric car-maker needs to pause hiring worldwide and cut its workforce by about 10 percent.

In early July, Meta boss Mark Zuckerberg warned employees that the company was facing one of the worst downturns in its history and that job losses are certain in the near future. The CEO of the tech giant that owns social media companies Facebook and Instagram said in uncertain terms there will be a scaling back of operations and employee departures owing to the tight financial squeeze the behemoth is facing.

Chinese tech giant Tencent said last week it sacked a whopping 5,500 employees after the June quarter revenue dipped 3 percent, which was the company's first quarterly revenue slip after listing.

Earlier in March, Reuters had reported that Alibaba Group and Tencent Holdings were preparing to cut tens of thousands of jobs combined this year.

Smartphone giant also has cut more than 900 jobs as the Chinese economy is witnessing a slowdown. The smartphone giant had revealed that its revenues fell 20 percent in the June quarter. The layoffs affected nearly 3 per cent of Xiaomi's workforce, according to the South China Morning Post.