‘Unusual Google’: The whole technology village competed to fire, but I remained ‘quietly silent’

Google has never had large-scale layoffs in its core business.

Up to now, the Internet giant Google has not made any move to lay off employees in the context that many other giants have cut tens of thousands of jobs in the past time. Most recently, Andy Jassy – CEO of Amazon announced that he will lay off 18,000 employees. Meanwhile, Salesforce also announced 8,000 job cuts last week.

It is estimated that the total number of employees laid off by Facebook, Amazon, Snap – the parent company of Snapchat and Twitter has reached 34,000, according to the Wall Street Journal.

Meta’s announcement in early November 2022 that it would lay off 13% of its workforce sparked speculation that Google might follow suit. Both rely heavily on online advertising for most of their revenue, and that market is taking a heavy hit from a slowing global economy.

Analysts estimate that Google’s parent company Alphabet’s ad revenue will grow only 9% in 2022 from 43% the year before. Meanwhile, Facebook’s parent company is expected to see its first annual decline in advertising revenue. The ad revenue growth of both giants is expected to remain in single digits through 2023.

According to the Wall Street Journal, Google is not Facebook. Facebook’s goal of becoming a metaverse company made investors unhappy, especially at the end of October last year, when the company announced it would not change its investment plans to develop the field. Meta’s share price has dropped more than 70% in 2022 just two weeks after it announced plans to mass layoffs.

However, Alphabet’s stock price has far outperformed Meta over the last year. Search ads have also proven more resilient to both the slowing economy and the changes made by Apple to its mobile platform, as opposed to social media advertising on Facebook. platforms like Facebook and Snap. And Alphabet remains financially strong, with a net cash balance more than double Meta.

Still, Google hasn’t escaped the pain of the ad recession, with its business falling slightly in the third quarter of 2022 compared to the same period in 2021.

That highlights the company’s dizzying headcount growth: More than 30,000 new employees were added to the roster in the first nine months of 2022, more than Google added in the whole of 2021. .

Alphabet’s senior executives say headcount growth will slow significantly. Google makes billions of dollars a year from intellectual property, such as the search algorithm, so the people who develop it are Google’s biggest asset, and they’re also the center of costs. According to calculations by the Wall Street Journal, the average salary that employees of this segment of Alphabet receives in 2021 is $ 295,884, the highest among the 500 largest public companies in the United States.

According to a CNBC report last month, Google is adopting a new employee rating system that could cause many employees to receive lower performance scores and thus be more likely to be targeted for layoffs. waste.

Google has never had large-scale layoffs in its core business (the massive headcount reduction in 2013 was the result of cutting back on the Motorola business it owned then).

However, at that time Google had only about 1,900 employees compared to nearly 187,000 today. And a recent spike in hiring has caused the company’s revenue per employee for the past 12 months to drop 8% from the beginning of 2022 to the end of the third quarter. With competitors actively looking for ways to do more with less, some experts say that perhaps Google also needs to start the process of mass layoffs in the near future.

Source: BI