Alphabet, the parent company of Google, plans to cut thousands of jobs. Around 12,000 jobs are to be lost worldwide, as company boss Sundar Pichai explained in a statement. The affected employees in the USA have already been informed.
6 percent of employees have to go
The 12,000 positions correspond to a share of six percent of the workforce. Google and other tech companies hired a large number of new employees during the corona pandemic. But now, as in many areas, business development is slowing down again, which also led to the group's sobering quarterly figures.
Recently 20 percent more employees per Year
Alphabet's net income already fell to $13.9 billion from $18.9 billion a year earlier due to advertiser restraint in its most recent quarterly figures, which were announced in October 2022. The decline in advertising revenues from the video platform YouTube, which fell year-on-year from 7.21 to 7.07 billion US dollars, was also striking. In order to strengthen the group's balance sheets, Google's major shareholder TCI Fund Management had demanded tough austerity measures and job cuts from Alphabet. The hedge fund criticized that the number of employees has increased by more than 20 percent per year since 2017. The growth was almost “excessive” during this time.
Google focuses more on its core business
Pichai indicated that areas outside of the core business will be more affected. This is one of the reasons why Google canceled around half of the research projects in its “Area 120” ideas laboratory last September, and a planned pixel book was also rejected. The final shutdown of the Stadia cloud gaming service a few days ago may also have been part of the effort to increase returns after Google had previously stopped developing its own Stadia games entirely because they were too expensive.
Microsoft, Meta and Amazon are also deleting jobs
With the deletion of 12,000 places, Alphabet is the one latest company in the tech industry to lay off employees. Microsoft, Amazon and Facebook, among others, had previously announced the elimination of 10,000, 18,000 and 11,000 jobs respectively. At Amazon, however, the proportion of the 18,000 jobs lost is significantly lower with around 1.5 million employees worldwide.
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