Google's parent company cuts 12,000 jobs

Following the movement among the tech giants, Google’s parent company, Alphabet, announced the loss of 12,000 jobs

So after Amazon, Meta and Microsoft, Google announces a large-scale social plan with the removal of just over 6% of its total workforce worldwide.

“Over the past two years, we have experienced periods of spectacular growth,” Alphabet boss Sundar Pichai said in an email to group employees.

“To support and fuel this growth, we hired in an economic context different from the one we know today,” he added, adding that the economic situation forced the company to reduce its workforce.

Alphabet had nearly 187,000 employees worldwide at the end of September 2022.

The job cuts will be “across all departments, functions, levels of responsibility and regions”, said Mr. Pichai without giving further details.

The American employees concerned have already been notified.

In other countries, the procedure will take longer depending on local labor law.

In the United States, the laid-off employees will receive at least sixteen weeks of salary, their bonuses for 2022, their paid holidays as well as six months of health coverage.

Foreign employees settled in the United States will also be able to benefit from assistance in their legal procedures if they wish to remain on American soil.

Wall Street welcomed the announcement of these job cuts: Alphabet shares rose around 3.77% around 2:45 p.m. GMT.

“While Google has been emphasizing the need to improve the efficiency of its various businesses, we believe investors wanted to see more of this through cost reductions,” CFRA’s Angelo Zino said.

Unsustainable pace

The American computer giant Microsoft announced on Wednesday the layoff of around 10,000 employees by the end of March, citing in particular economic uncertainty.

The Wayfair furniture sales site for its part announced on Friday that it would cut around 1,750 jobs, or 10% of its workforce, to compensate for sluggish activity.

And, over the previous weeks and months, Meta (Facebook, Instagram), Amazon, Twitter and Salesforce have also decided to part ways with several thousand employees.

The tech sector is facing a difficult period in the context of high inflation and rising interest rates after a good period, especially at the height of the Covid-19 pandemic and the lockdowns.

In this context, advertisers are more reluctant to incur advertising expenditure, which represents a substantial part of the turnover of companies such as Google, Facebook or Twitter.

According to the specialized site Layoffs.fyi, nearly 194,000 employees in the sector have lost their jobs in the United States since the beginning of 2022, not counting Alphabet’s announcement on Friday.

“Tech stalwarts have been hiring at a rate that was unsustainable and the deteriorating macro environment is now forcing them to lay off,” commented Dan Ives of Wedbush Securities.

“Midnight struck for hypergrowth as tech companies spent money like rock stars in the 1980s,” the analyst continued.

According to Mr. Ives, tech, which is evolving at stock market levels that are too low, will experience a rebound in 2023: he forecasts a 20% rise in stocks in this sector this year.

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