Why did Google lay off 6% of its workforce despite profits? 

 By Hazel Antiporta

Google is the latest technology company to announce mass layoffs, sacking some 12,000 workers, more than 6% of its global workforce, the biggest in its history. The move, which affects employees in the United States, will be followed by layoffs in other countries, where the process will take longer due to labour laws. 

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So far, 18,000 jobs have been lost at Amazon (6% of the total), 12,000 at Google (6%), 11,000 at Meta (13%) and 10,000 at Microsoft (5%). The company missing from the top group, Apple, has not yet announced any cuts, largely because it had a more cautious hiring policy during the times of plenty and also kept its operating expenses lower than its rivals. To those already mentioned, we should add 9,000 more departures at Salesforce, 4,100 at Cisco, 3,700 (for the moment) at Twitter, which has been left with 1,300 employees and only 550 engineers, 1,500 at Carvana, 1,250 at DoorDash, 1,000 at Stripe, and many others at a very long list of other companies. It’s a massacre. 

Most of these companies are profitable, but, as Sundar Pichai, hired “for a different economic reality than the one we face today.” For older, more experienced workers, nothing new, except for the magnitude: one more down cycle in the economy like others they have lived through. For younger people, this is dramatic: over the last few years, I have seen bright students who once dreamed of working in consulting or investment banking going to work in technology companies instead, and I can imagine the feelings for those who have been sacked. The company will carry out the layoffs by applying full salary for a minimum of 60 days’ notice, plus a 16-week payout plus two weeks per year worked, total 2022 bonuses and vacation, six months of health insurance, outplacement services, and immigration counselling service for workers affected by the termination of their visas. 

In the case of Google, the surprise is not so much the layoffs themselves but the way they were made: the decision affects the entire workforce, regardless of their experience, their performance, the area in which they were working, or whether they had been recently promoted. No one understands the criteria, which, to say the least, seems arbitrary. Dory, the corporate Q&A platform, has said nothing, and all the affected employees know is that on Friday morning, they found that their corporate login credentials no longer worked. 

For a company like Google, where employees once felt pampered, widespread bewilderment is being shared on discussion groups on platforms like Discord. Of concern is the fact that the layoffs are taking place at a company that generated $17 billion in profit in the last quarter alone and where there has been absolutely no talk of cuts in compensation or bonus for its executives, which calls into question Sundar Pichai’s “I take full responsibility for the decisions that got us here” statement. What exactly does “take full responsibility” mean for a person with several million-dollar salaries and who received a significant raise in December 2022? 

The company’s share price rose 5% following the news.