Google had so far not cut jobs even though other tech giants have let thousands of employees go amid global financial crunch
Google’s outlier status amid staff cuts by fellow tech giants is set to go as its parent company Alphabet, too, plans to fire a significant chunk of its workforce — around 6 per cent, or 10,000 people. It’ll be done after identifying those who are performing below expectations, insiders have said. But at the nub of the impending cut is the tough — and worsening — global financial situation, according to tech news portal The Information.
Team managers have been asked to evaluate staff in a new “ranking and performance improvement plan”. The purge may begin by early 2023, meaning just another few weeks.
In the previous performance review system, managers were expected to put 2 per cent of employees in that bucket.
Google or Alphabet hasn’t confirmed any layoff plans as yet. The leading news channel has reached out to Google for a comment on the report.
But chief executive Sundar Pichai had hinted at it a couple of months ago. He had said that Google believes as a company that “when you have fewer resources than before, you are prioritizing all the right things to be working on and your employees are really productive…”.
In its report, The Information said the system would first allow managers to decide not to pay bonuses. “As layoffs spread across Silicon Valley, Google has stood out by not cutting employees so far. But as outside pressure builds on the company to improve the productivity of its workers, a new performance management system could help managers push out thousands of underperforming employees starting early next year,” it reported.
Several big tech companies had bet on the surge of online activity during Covid to continue once the pandemic wanes too. But that did not happen.
Facebook founder and Meta boss Mark Zuckerberg said as much when he announced a cut of 11,000 jobs, which was around 13 per cent of the company’s workforce.
At Twitter, a change overdrive by new owner Elon Musk has meant 60 per cent of the 7,000-odd staff is gone. He says he won’t settle at losses, so needs to restructure almost everything.
Google or Alphabet has been facing pressure from investors too.
Activist investor TCI Fund Management recently called on the company to cut costs by lowering its headcount, saying that it needs to adjust to an era of slower growth, according to news agency Reuters. The fund, an investor in Alphabet since 2017 with a $6 billion stake, said the company had “too many employees and cost per employee is too high”.
TCI said Alphabet pays some of the highest salaries in Silicon Valley, noting that the company has increased headcount by 20 per cent annually since 2017.