Google Parent Alphabet to Cut 12,000 Jobs Amid Wave of Tech Layoffs
Decision marks the company’s largest-ever round of job reductions

The job reductions at Google parent Alphabet will cut across its units and
regions.  PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS By Sam SchechnerFollow
 and Miles KruppaFollow
Updated Jan. 20, 2023 8:27 pm ET


Google’s parent company said it would cut its staff by 6% in its
largest-ever round of layoffs, extending a retrenchment among technology
companies after record pandemic hiring.

Alphabet Inc. GOOG 5.72%increase; green up pointing triangle said the
cuts would eliminate roughly 12,000 jobs across different units and
regions, though some areas, including recruiting and projects outside
of the company’s core businesses, would be more heavily affected.

The layoffs reached as high as the vice president level and affected
divisions including cloud computing and Area 120, an internal business
incubator that had already faced cuts last year, said people familiar
with the matter.

The Google cuts make January the worst month yet in a wave of tech
layoffs that began last year, according to estimates from Layoffs.fyi,
which tracks media reports and company announcements. This week, Microsoft
Corp. said it would eliminate 10,000 jobs, the largest layoffs in more
than eight years. Online furniture seller Wayfair Inc. said it is laying
off about 10% of its workforce, and Unity Software Inc., which provides
tools for creating videogames and other applications, also cut staff.


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Subscribe Earlier this month, Amazon.com Inc. said layoffs would affect
more than 18,000 employees and Salesforce Inc. said it was laying off 10%
of its workforce. Last year, Meta Platforms Inc. said it would cut 13%
of staff.

Technology companies including Google expanded rapidly during the
pandemic as life moved online. Recent cuts have been part of a broader
pivot toward protecting profit and cementing the end of a growth-at-all
costs era in technology. Google executives have in recent months said the
company would be tightening its belt, reflecting a new period of more
disciplined and efficient spending. But the company hadn’t announced
cuts as deep as those of its Silicon Valley peers.

Google hired aggressively as demand for its services rose during the
health crisis, leading to more than 50% growth in total employee count
across Alphabet since the end of 2019. The cuts this week appeared to
fall short of the almost 12,800 employees Alphabet added to its roster
in the third quarter last year.

“Over the past two years we’ve seen periods of dramatic growth. To
match and fuel that growth, we hired for a different economic reality
than the one we face today,” Alphabet Chief Executive Sundar Pichai
wrote in a message to employees sent out Friday and posted on the
company’s website.

“I take full responsibility for the decisions that led us here,”
Mr. Pichai wrote. The corporate mea culpa for overhiring has become
a recurring message in recent months at tech companies as executives
realized that some of the hiring they undertook to keep pace with soaring
demand for all things digital early in the pandemic left them overstaffed
as the business environment soured.

Among the executives who have made such apologies are Salesforce Co-Chief
Executive Marc Benioff, Meta Platforms CEO Mark Zuckerberg and Twitter
Inc. co-founder Jack Dorsey.

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match broader economic indicators, which show a strong job market and a
historically low unemployment rate. WSJ’s Gunjan Banerji explains the
disconnect. Illustration: Ali Larkin Alphabet recorded $17.1 billion of
operating income in the third quarter last year, an 18.5% decrease from
the same period in 2021. Google executives partly blamed a slowdown in
revenue growth on the company’s historic performance during the tail end
of the pandemic. Alphabet shares rose 5.3% to $98.02 in Friday trading.

Alphabet earlier this month said it would cut more than 200 jobs at its
Verily Life Sciences healthcare business, accounting for about 15% of
the roles at the unit. Before that, some of the last major cuts Google
announced were in 2009, when the company said it was reducing the number
of jobs in its sales and marketing teams by roughly 200 globally.

Activist hedge fund TCI Fund Management, which had called on Alphabet
to cut costs aggressively in November, said Friday the company should
go further.


“Management should aim to reduce headcount to around 150,000, which is
in line with Alphabet’s headcount at the end of 2021,” Christopher
Hohn, TCI managing director, said in a letter. “This would require a
total headcount reduction in the order of 20%.”

Current and former Google employees said layoffs would likely affect the
company’s famously loose and collegial culture, which has been widely
imitated in the tech industry.

Google employees have long enjoyed one of the most accommodating
environments among large U.S. companies. A letter to potential investors
in Google’s 2004 initial public offering said the company provided
many unusual benefits, such as washing machines, and would likely add
more over time.

As job cuts have accumulated in the tech industry, many employees at
Google have pressed executives about the possibility of layoffs at the
company. At a companywide meeting in December, Mr. Pichai told employees
that the company had tried to “rationalize where we can so that we
are set up to better weather the storm regardless of what’s ahead.”

WHAT’S NEWS The Wall Street Journal Whats News Google Joins Wave of
Tech Companies Laying Off Workers


SUBSCRIBE A Google spokesman said that Friday’s cuts would affect
not just Google, but also other Alphabet subsidiaries, but didn’t
specify at what levels. Alphabet subsidiaries include Verily and the
Waymo self-driving-car unit. The spokesman didn’t comment on which
specific products or engineering units would be affected.

“Alphabet leadership claims ‘full responsibility’ for this decision,
but that is little comfort to the 12,000 workers who are now without
jobs,” said Parul Koul, executive chair of the Alphabet Workers Union,
in a statement. “This is egregious and unacceptable behavior by a
company that made $17 billion dollars in profit last quarter alone.”

Alphabet said it would offer U.S.-based employees two months notice,
plus 16 weeks of severance pay, along with two additional weeks for each
year an employee being laid off from the nearly 25-year-old company
has worked there. In other countries, the company will follow local
processes and laws, which sometimes require consultations with employee
representatives before workers are laid off.

The company will also offer former employees access to resources to help
them with their immigration status, job placement and mental health,
the spokesman said. Tech companies in the U.S. often have employees on
work visas tied to their employment.

Write to Sam Schechner at Sam.Schechner@wsj.com and Miles Kruppa at
miles.kruppa@wsj.com