Why did it happen?
- Google’s parent – Alphabet’s shares had fallen 30% in the past 12 months, which is more than the 24% slump in the broader tech industry
- DOJ is poised to sue Google for antitrust compliance over digital ad market dominance.
- AI is the future, search engines will slowly fade away. Some news reported Microsoft is buying into ChatGPT.
- Slower business growth is projected even as the market corrects where online services demand dropped significantly after the world returned to somewhat normalcy compared to the strict lockdown days of Covid-19 back in 2020-2022.
- Jumping on the bandwagon even as other Tech Giants such as Amazon, Microsoft, and Meta cut between 1 to 13% of their workforce.
- Meta (13% = 11k jobs)
- Salesforce (10% = 8k jobs)
- Spotify (6% = 400 jobs)
- Microsoft (4.5% = 10k jobs)
- Amazon (1% = 18k jobs)
- Google’s workforce actually grew by 32% in the last 2 years while they also made 3 major acquisitions of Mandiant, Fitbit and Looker during the last 3 years which cost in all $ 10 billion
- The Washington Post found in December 2020 that 45 of the 50 most valuable publicly-traded companies turned a profit between April and September 2020, where at least 27 of the 50 implemented layoffs over the same time period.
Conclusion
There is pressure from all directions for Google to take this drastic move, from the shareholders, regulator, the rise of AI, slower growth, taking the opportunity of the bandwagon, ballooning staffing and acquisition costs as well as for the CEO to quickly show a profit.
Here is the memo from Google’s CEO.
The good news for all is that we now have 70,000 tech employees open for hire. Yes, there is economics in talent too, that’s why we call it the job market.
