Alphabet, Google’s parent company, is likely to join the list of Big Tech companies implementing mass layoffs. With this, nearly the entire universe of FAANG — an acronym for Facebook, Amazon, Apple, Netflix, and Google — has now been hit by layoff turbulence, affecting tens of thousands of tech jobs worldwide.
On Tuesday, reports surfaced that the Mountain View (California)-based tech behemoth planned to lay off around 10,000 employees. This comes on the heels of unprecedented job cuts at Meta (Facebook), Amazon, and Twitter. Apple has already announced a hiring freeze, and Netflix laid off approximately 450 workers in two rounds earlier this year.
The layoff at Alphabet is part of the company’s performance improvement plan, which was announced earlier this year. According to The Information, a San Francisco-based business publication, managers have been asked to label 6% of their employees, or approximately 10,000 people, as low performers.
The company declined to comment on the report, and the impact of Google (Alphabet) layoffs in India could not be independently verified. Google employs approximately 5000-6000 people in India. In 2020, the company announced a $10 billion investment to accelerate the adoption of digital technologies in the country.
The layoff news at Google comes just days after a letter to Alphabet from hedge fund TCI, an investor in the company. TCI owns $6 billion in Alphabet stock.
“The company has too many employees, and the cost per employee is too high,” said TCI’s Christopher Hohn, MD, in a letter.
He also mentioned that Alphabet CEO Sundar Pichai had stated that the company should be 20% more efficient. “Nearly all technology companies are reducing costs. Meta reduced headcount by 13 per cent last week. Amazon is reducing headcount by 10,000. Microsoft, Salesforce, Stripe and Twitter are also reducing headcount,” said the letter dated November 15, 2020.
Meta’s stock price has increased by 18% since the layoffs were announced at the end of October (till closing of November 21).
According to the TCI letter, Alphabet pays the highest salaries among its tech peers. According to Alphabet’s Schedule 14A filing, its median compensation in 2021 will be $295,884. This is 67% higher than at Microsoft and 153% higher than the 20 largest publicly traded companies in the United States.
Google discussed its hiring plans during its third-quarter earnings call. Pichai had previously stated that the company’s Q4 headcount additions would be significantly lower than in Q3. “And as we plan for 2023, we’ll continue to make important trade-offs where needed, and are focused on moderating operating expense growth,” “And, as we plan for 2023, we’ll continue to make important trade-offs where necessary, with a focus on moderating operating expense growth,” he had said.