Alphabet, the parent company of Google, has announced that it will be cutting 12,000 jobs, representing 6% of the company’s workforce worldwide. This news comes days after Microsoft announced that it would be cutting 10,000 jobs and weeks after Amazon announced that it would be cutting 18,000 jobs. Google and Alphabet CEO Sundar Pichai took “full responsibility” for the cuts in an internal email to staff. Pichai thanked staff for their hard work and contributions, and announced severance packages for US employees.
The job cuts will affect teams including recruitment and engineering. It is unclear how many of Google’s 5,500 staff in the UK will be affected by the cuts. Wall Street has welcomed the cuts, with Alphabet shares rising by 3.5% in electronic trading before the stock market opened. Analysts have said that the big tech companies had previously overspent, not seeing a slowdown on the horizon.
Daniel Ives of Wedbush Securities said that the layoffs highlight irresponsible spending across a sector basking in “hypergrowth”. He said, “The reality is tech stalwarts over-hired at a pace that was unsustainable and now darker macro is forcing these layoffs across the tech space.” This sentiment is supported by the fact that nearly 194,000 industry employees have lost their jobs in the US since the beginning of 2022, not including those announced by Alphabet on Friday.
Hewlett Packard and cloud computing giant Salesforce also announced major cuts this month, as rampant inflation and rising interest rates have slowed growth. Tech job cuts are being seen as a warning for the wider economy, and US tech giants have also been facing scrutiny in the European Union for avoiding tax, stifling competition, profiting from news content without paying, and serving as platforms for disinformation and hate.
