Google Parent Alphabet Cutting 12K Jobs in ‘Different Economic Reality’

Google parent Alphabet is cutting 12,000 jobs as it adjusts to the current macroeconomic environment.

Google and Alphabet CEO Sundar Pichai said in a Friday (Jan. 20) message to employees that the cuts will range across the company’s product areas, functions and regions.

“Over the past two years we’ve seen periods of dramatic growth,” Pichai said in the message. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”

The announcement follows a difficult year for the tech industry, which has seen both layoffs and plunging market valuations.

Tech companies eliminated more than 153,000 jobs in 2022, with Meta slashing 11,000 and Amazon cutting 10,000, according to Layoffs.fyi.

During the same 12-month period, the 10 top tech stocks lost a combined $4.6 trillion in market cap. Alphabet saw the second-largest drop, with its $787 billion reduction in valuation behind only Amazon’s $856 billion plunge, Seeking Alpha reported Dec. 31.

In November, investor TCI Fund Management called on Alphabet to reduce its headcount, lower its compensation and cut its losses in self-driving car project Waymo and related efforts.

TCI Managing Director Christopher Hohn said in a Nov. 15 letter addressed to Pichai that Alphabet’s total expenses had risen 18% year over year during the most recent quarter, while its revenues grew only 6%.

“In a new era of slower revenue growth, aggressive cost management is essential,” Hohn said in the letter.

As PYMNTS reported Oct. 30, in the week that Alphabet, Amazon, Meta, Microsoft and other Silicon Valley Big Tech firms announced their third-quarter earnings, the general picture reflected a worldwide slowdown in spending as most of the firms posted weaker-than-expected quarterly results.

In his Friday message, Pichai said the cuts on Alphabet will sharpen its focus on key areas, including artificial intelligence (AI). He added that the company’s earlier investments in AI have led to advances that have improved products across the company and that the firm is getting ready to debut its latest AI offerings.

“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,” Pichai said in the message. “To fully capture it, we’ll need to make tough choices.”