Google Parent Alphabet To Cut 12,000 Jobs, Over 6% Of Its Global Workforce

The cuts will affect jobs globally and across the entire company, its Chief Executive Officer Sundar Pichai said in a staff memo on Friday.

“These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities," Pichai wrote in an email.

He said the company has a “substantial opportunity in front of us" with artificial intelligence, a key investment area where Google is facing a surge in recent competition.

“I am 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 Alphabet CEO said.

What will affected employees get? 

Pichai said Alphabet would be paying affected employees 16 weeks of severance and six months worth of health benefits in the US, with other regions receiving packages based on local laws and practices.

Pichai also said that he takes “full responsibility for the decisions that led us here."

The cuts mark the latest to shake the technology sector and come days after rival Microsoft Corp said it would lay off 10,000 workers.

The job losses affect teams across the company including recruiting and some corporate functions, as well as some engineering and products teams.

The layoffs are global and impact US staff immediately, Google said.

In October last year, the company reported earnings and revenue that missed analyst expectations. Profit declined 27% to $13.9 billion compared to the prior year. 

At the time, Pichai said Google would curb its expenses and Chief Financial Officer Ruth Porat said the number of new jobs would fall by more than half in the fourth quarter from the previous period.

Google’s reduction in headcount follows investor pressure to adopt a more aggressive strategy to curb spending.

Google has made a series of cost-cutting moves in recent months, canceling the next generation of its Pixelbook laptop and permanently shuttering Stadia, its cloud gaming service. Earlier in January, Verily, a biotech unit of Alphabet, said it was cutting 15% of its staff.

The news comes during a period of economic uncertainty as well as technological promise, in which Google and Microsoft have been investing in a fledgling area of software known as generative artificial intelligence.