As the next heavyweight in the tech industry, Google’s parent company Alphabet is cutting thousands of jobs. Around 12,000 jobs are to be lost worldwide, company boss Sundar Pichai wrote in an email to employees published on Friday. This corresponds to around six percent of the workforce. Just this week, Microsoft announced that it would cut 10,000 jobs. Before that, Amazon announced it was cutting 18,000 jobs, and the Facebook group Meta already cut 11,000 jobs in November.
With the booming business in the corona pandemic, the tech companies had increased their number of employees, in some cases significantly. According to the latest figures available, Alphabet had almost 186,800 employees as of the end of September. That was around 36,750 more than a year earlier. The decision to cut jobs weighed heavily on him, Pichai wrote. “And I take full responsibility for the decisions that brought us here.” After the “dramatic growth” in the pandemic, the workforce was built up “in a different economic reality than today”.
Alphabet shares were up a good three percent after the announcement. Recently, the business development of the tech giants has slowed down, among other things due to economic concerns and high inflation. Google and Meta earn their money almost exclusively with online advertising – and felt the thriftiness of large and small companies. At Amazon, in addition to the reduced willingness of consumers to buy, the increasing logistics costs had an impact. In terms of the extent of the cuts, Alphabet is roughly at the level of Microsoft, where almost five percent of the jobs will be lost. Meta even cut 13 percent of the jobs. At Amazon, with its 1.5 million employees, mainly in logistics centers, 18,000 jobs only make up a small proportion, but the office jobs are badly affected. Twitter stands alone, where tech billionaire Elon Musk, as the new owner, fired about half of the approximately 7,000 employees.
Pichai hinted that Alphabet’s non-core businesses will be more affected. These are likely to be future projects such as Waymo’s robotic taxis or delivery drones that are not profitable.