LONDON (AP) — Google is cutting 12,000 jobs, or about 6% of its workforce, becoming the latest technology company to lay off workers as the industry benefits from an economic boom during the COVID-19 pandemic.
Google CEO Sundar Pichai, who also heads parent company Alphabet, informed employees of the Silicon Valley giant about the layoffs in an email posted on the company’s news blog on Friday..
It’s the company’s largest round of layoffs and adds to tens of thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent Meta and other tech companies as they tighten their belts amid a darkening outlook for the industry. This month alone, at least 48,000 job cuts were announced by major companies in the sector.
“Over the past two years, we’ve seen periods of dramatic growth,” Pichai said. “To match and fuel that growth, we’ve hired for a different economic reality than we face today.”
He said the layoffs reflect a “serious review” by Google of its operations.
Pichai said the job cuts “are broken down alphabetically, across product lines, functions, levels and regions.” He said he “deeply regrets” the cuts.
Regulatory filings show how Google’s workforce has grown during the pandemic, from 119,000 at the end of 2019 to about 187,000 at the end of last year.
Pichai said Google, which was founded nearly a quarter of a century ago, “had to go through tough economic times.”
“These are critical moments to sharpen our focus, realign our cost base and focus our talent and capital on our highest priorities,” he said. He called the company’s investments in artificial intelligence an area of opportunity.
According to Pichai’s letter, jobs will be cut in the US and other unspecified countries.
Tech companies that were “sometime darlings of the stock market” have been forced to freeze hiring and cut jobs to prepare for the economic downturn, Victoria Scholar, an analyst at UK-based Interactive Investor, said in a note.
“Digital spending is suffering and ad revenue is falling with it,” he said.
This week alone, Microsoft cut 10,000 jobs, or about 5% of the workforce. Amazon said it was cutting 18,000 jobs this month, though that’s a fraction of its 1.5 million-strong workforce, while business software maker Salesforce is cutting about 8,000 jobs, or 10% of its total workforce. Last fall, Facebook parent Meta announced It would cut 11,000 jobs, or 13% of its workforce. Elon Musk cut jobs at Twitter after buying the social media company last fall.
These job cuts are also hitting smaller players. UK-based cybersecurity firm Sophos has laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase has cut 20% of its workforce, nearly 950 jobs, in its second round of layoffs in less than a year.
Despite signs of a slowing economy, U.S. employment held steady, adding 223,000 jobs in December.. However, the tech sector has grown quite rapidly over the past few years due to increased demand as workers have started to work remotely.
CEOs of a number of companies have been blamed for growing too fast, but those same companies, even after the latest round of job cuts, remain bigger than they were before the economic boom from the pandemic began.
“I take full responsibility for the decisions that got us here,” Pichai wrote.
John Blevins, an assistant professor at Cornell University’s business school, says that while tech layoffs are “shocking numbers,” their impact on employment in the tech industry is “not as bad as it seems.”
“These laid-off workers will easily find new jobs,” Blevins said, most likely at smaller technology companies. “They come with high credentials from these big firms. That knowledge will be transferred and actually work for everyone’s benefit.
In the layoff announcements, both Pichai and Microsoft CEO Satya Nadella emphasized the need to capitalize on their advances in artificial intelligence technology, reflecting renewed competition between the tech giants fueled by Microsoft’s growing partnership with San Francisco startup OpenAI.
Shares of Mountain View, Calif.-based Alphabet Inc. rose more than 4% on Friday.
AP Technology Writers Matt O’Brien and Michael Liedtke contributed to this report.