[Asia Economy New York=Special Correspondent Joselgina] Following Microsoft and Amazon, Alphabet, the parent company of Google, has also joined the ranks of large-scale layoffs. There is a flood of assessments that it could not avoid concerns over economic recession and slowing performance.
Sundar Pichai, CEO of Alphabet, announced in an email to employees on the 20th (local time) that about 12,000 employees, approximately 6% of the entire workforce, will be laid off. This is the largest scale since the company's founding.
This layoff measure applies to all job categories including HR, technology, and product across global subsidiaries. CEO Pichai confirmed, "This is a measure to respond to the changing economic realities," adding, "In areas unrelated to core tasks, the scale of workforce reduction may be larger than in other sectors."
Those laid off will receive 16 weeks of pay and six months of health insurance benefits. The company confirmed that in countries outside the United States, other welfare benefits will be provided according to local laws.
With Google Alphabet joining the layoff wave, the employment chill triggered by US big tech is intensifying. Earlier, Microsoft, the third-largest company by market capitalization, announced it would lay off 10,000 employees, accounting for 5% of its total workforce. Alphabet’s life sciences subsidiary Verily also recently announced it would reduce its workforce by about 15%, or 200 employees.
Alphabet has been evaluated as having performed relatively well compared to other big tech companies, based on its solid market share in the search sector. However, due to recent sharp interest rate hikes and growing concerns over economic recession, its performance has deteriorated, and with increasing economic uncertainty, it is analyzed that the company has ultimately taken cost-cutting measures including workforce restructuring.
Bloomberg News explained the background, stating, "Alphabet’s digital advertising revenue has recently slowed, and it is lagging behind Amazon and Microsoft in the cloud computing sector." The earnings announced last October fell short of market expectations.
Meanwhile, following the layoff news, Alphabet’s stock price closed up more than 5% on the New York Stock Exchange that day.
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