Google Cloud Parent Alphabet Laying Off 12,000 As Sundar Pichai Takes ‘Full Responsibility’
‘Over the past two years we’ve seen periods of dramatic growth,’ says Alphabet CEO Sundar Pichai. ‘To match and fuel that growth, we hired for a different economic reality than the one we face today.’
Google parent Alphabet Friday said it is laying off 12,000 employees or about six percent of the workforce in the latest in a long line of tech layoffs.
“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here,” said Alphabet CEO Sundar Pichai in an email to Google employees. “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
Pichai said he remains confident about “future growth” given the opportunities ahead and the company’s “early investments” in artificial intelligence.
“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI,” said Pichai. “To fully capture it, we’ll need to make tough choices. So, we’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.”
CRN reached out to see whether there is any breakout regarding how many Google Cloud employees are being laid off, but had not heard back at press time.
Microsoft Also Laying Off Thousands
Pichai’s view of opportunity ahead with AI even in the midst of a weakened economy mirrored the missive sent by Microsoft CEO Satya Nadella just two days earlier after Nadella confirmed that the software giant was laying off 10,000 employees or less than five percent of its workforce.
Nadella said customers that accelerated their digital spend during the pandemic are now optimizing to do more with less. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” he said. “At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.”
Pichai, for his part, said this is a time for Alphabet and Google to sharpen its focus, “reengineer” its cost base and direct “talent and capital” to highest priorities such as AI.
“Being constrained in some areas allows us to bet big on others. Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry,” he said. “Thanks to those early investments, Google’s products are better than ever. And we’re getting ready to share some entirely new experiences for users, developers and businesses, too. We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly.”
Alphabet and Google continue to have a “healthy disregard for the impossible,” said Pichai. “When I look around Google today, I see that same spirit and energy driving our efforts. That’s why I remain optimistic about our ability to deliver on our mission, even on our toughest days. Today is certainly one of them.”
Layoffs Impacting Entire Tech Industry
Google and Microsoft are the latest in a long list of tech companies laying off employees. Just this month, Cloud Software Group, the parent company of Citrix and Tibco, confirmed that it was laying off 15 percent of its workforce, which amounted to approximately 2,000 positions; cloud communications provider 8x8 said it laid off seven percent of its staff or 155 employees and enterprise cloud data management software provider Informatica said it was also laying off seven percent of its workforce or about 450 employees.
Even with all the tech layoffs, Michael Hadley, president and CEO of iCorps Technologies Inc., Woburn, Mass., a CRN Tech Elite 250 company, said he sees no let-up in the appetite for cloud computing, digital transformation and cybersecurity among his customers.
In fact, Hadley said said his company’s sales were up double digits last year with big growth in Azure, Microsoft 365 and security solutions. He expects another year of strong double-digit growth in 2023 led by his Microsoft cloud business and his fast-growing security business.
“I see these layoffs as companies that were caught up in the pandemic technology bubble and hired too fast,” said Hadley.
Hadley said he views the tech layoffs as an opportunity to hire some great tech talent. “We are going to go after some of these Google and Microsoft employees that are being laid off,” he said. “This is an opportunity to get some great talent. We have never stopped hiring great talent and we continue to do that. We increased our workforce by 20 percent in 2022 and we expect to grow our staff by double digits this year.”
Hadley said he believes companies are tightening their belts in order to pacify shareholders in the wake of recession fears. “If you look at the stock market, the stocks of companies laying people off are going up,” he said. “This is all about pleasing shareholders. The problem is these layoffs feed into economic fears that I see as unfounded. What big tech company wants to be the company that does not implement layoffs?”
Among the companies that have implemented layoffs are Amazon, which announced plans to lay off 18,000 employees earlier this year from its retail business with its Amazon Web Services business not impacted.