Big Tech Continues to Downsize Staff

If Google (NASDAQ: GOOGL) commits to downsizing, it will follow Big Tech peers like Meta (NASDAQ: META) and Amazon (NASDAQ: AMZN) that have already slashed headcounts this year

FREMONT, CA:Big names like Meta (NASDAQ: META), Twitter, and Amazon (NASDAQ: AMZN) have all started hiring fewer people in 2022 as the state of the world economy weighs on wallets and portfolios. With the major corporations cutting the fat by 10,000+ heads each, November tech layoffs alone had exceeded 45,000 heads.

However, Google (NASDAQ: GOOGL) has mainly been able to avoid discussions of downsizing until now. The Information, a tech news website, reported that Google parent Alphabet suddenly feels the squeeze. Unfavourable market circumstances are still hammering profit margins and stock prices. At least one wealthy activist investor has urged the corporation to cut excessive headcounts and per-employee costs.

New performance improvement plan, Google may lay off as many as 10,000 workers, or six per cent of its staff, in the first quarter of 2023. The Information claims that Google has asked team managers to evaluate staff members utilising a new ranking and performance improvement scheme.

In prior systems, managers were typically expected to eliminate the lowest performers by taking two per cent or so of the total workforce. However, the revised plan calls for letting go of nearly 10,000 more employees, or nearly three times as many.

In general, the approach enables management to evaluate personnel based on their output and effects on the company. The number of employees receiving the highest ratings is restricted by updated standards. The bottom six per cent of the workforce could be fired from the organisation.

The Information further states that, to further cut expenses, managers might utilise the ratings to forgo paying [workers] bonuses and stock grants.

Like many other major tech companies, Google experienced significant expansion and recruiting during and after the pandemic. The increase was mostly caused by rising technology adoption and businesses retaliating against the great resignation by snatching up top talent wherever they could. But many businesses have realised they employed a surplus of people as inflation and interest rate increases rage on, advertising cuts spending, and experts screech about a future recession. Many are now forced to pick between deflated headcounts or deflated bottom lines as a result.

Google has officially confirmed no layoffs to date. However, many of the developments in the broader tech industry during the past two years can be seen in its employment and growth patterns. In addition to warning some teams to shape up or ship out if they can't match the new standards, the business recently froze all new recruiting.

Additionally, making adjustments hints is CEO Sundar Pichai. Pichai specifically mentioned that Google could become 20 per cent more efficient, implying at layoffs and increased productivity. He believes that despite Google's continued long-term investments, the company needs to be smart, frugal, scrappy, and more efficient.