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Journalism of Courage
With the barrage of tech layoffs, the year started on a rather patchy note. Now, one of the biggest of all, Google has asked its employees to brace themselves for impending layoffs. In the initial weeks of January, the Alphabet Inc. company laid off thousands across vertices. Subsequently, in a memo, the CEO Sundar Pichai said that more job roles will be impacted going forward.
“We have ambitious goals and will be investing in our big priorities this year…The reality is that to create the capacity for this investment, we have to make tough choices,” read the memo as reported by The Verge. The 51-year-old said that some of the layoffs this year were intended to “remove layers to simplify execution and drive velocity in some areas.” However, he also indicated that this year’s eliminations will not be at the scale of the previous year, where the company sacked close to 12,000 employees from various domains.
Pichai’s words add to the growing concerns among millions of professionals about potential job cuts. The latest turn of events also indicates the shifts in investments towards other areas of technology such as AI, which could potentially contribute to a reduction of the workforce. The cited memo came following Google’s announcement to cut nearly 100 jobs at its video platform YouTube. The world’s most popular video portal reportedly employed close to 7,200 people.
The CEO signalling that there would be more job cuts, comes at a time when professionals in Silicon Valley are on the edge owing to the massive upheavals the tech industry has been witnessing in the last two years. It needs to be noted that Pichai’s word of caution goes beyond Google and serves as a reminder to big Silicon Valley players. Although the layoffs are not at the scale of 2023, it underscores the current theme of cost discipline which is seen across corporates in the US. Even as more and more companies report their earnings, this theme is believed to continue to be a priority for 2024.
On January 16, it was reported that Google was downsizing its advertising-sales team, planning to cut hundreds of roles in a restructuring move, according to a memo by Philipp Schindler, Google’s chief business officer. The job cuts were reported to be an outcome of a shift from large-customer sales to the Google customer-solutions team. This was essentially a reflection of the prevailing trend where major clients require fewer resources. Despite ongoing efforts to automate processes with tools like Performance Max, these layoffs come amid a broader restructuring within Google, following recent job cuts in its devices unit.
In the last one year, we saw rapid strides in AI and for Google it is a key focus and has plans to invest more in this direction in the coming days. As of now, Microsoft is widely known as the leader in the AI space, and experts feel this has placed Google in a catch-up position. Even as the tech behemoth is scrambling to be at the top of the game, with its allocation of funds to its AI division, there could be more layoffs across various teams. As this aligns with Google’s commitment to prioritising its future in AI. All of these job cuts are seen as part of a bigger strategy to achieve not only cost discipline but also to ensure that the company has a competitive edge in this rapidly changing tech landscape.
With each reported layoff, Google has offered some kind of justification as to why it axed jobs. However, let us explore some common reasons why the company laid off its staff and has similar plans for the future.
Experts point out economic slowdown and overhiring. It needs to be noted that Google witnessed a significant slowdown in growth in 2023, and this may have triggered more cost cuts and pressure to reduce headcount. Similarly, like Meta, Google too ramped up hiring during the pandemic when the demand for their services was on an all-time high. Eventually, when the economy plunged, these companies overshot their staff needs.
Shifting priorities too seem to be a major driver for the layoffs as Google has been heavily investing in AI and cloud computing. This largely required them to reallocate resources and personnel, also leading to layoffs in those domains that did not align with these shifts. Another commonly cited factor is the increased competition, as Google is facing stiff competition from Amazon, Apple, Microsoft, etc. This pressure induced by competition too is attributed to increasing cost-cutting measures.
Besides, global economic uncertainty – especially in terms of wars – rising inflation and disruptions in the supply chain are also causing significant economic turbulence. As a result, businesses are hesitant to invest in new talents. Another facet is that many experts believe that the tech industry experienced a bubble during the pandemic. This was driven by easy access to capital and low interest rates. Owing to the uncertainty and higher interest rates, the bubble burst with many companies now embarking on a course correction by laying off employees, and shutting down projects. Not just in Silicon Valley, the advent of AI and automation has practically made several jobs obsolete in various industries including tech. Experts feel this could lead to more job losses in the coming days.
The above-mentioned factors are potential causes based on trends, and the specifics of layoffs as those seen in Google are heavily dependent on its circumstances.
